Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. YES [X] NO [ ]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act. YES [ ] NO [X]

Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES [X] NO [ ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
(§229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this
Form 10-K
or any amendment to this
Form 10-K.[ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer or a non-accelerated
filer. See definition of accelerated filer and large
accelerated filer in
Rule 12b-2
of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the Act). YES [ ] NO [X]

The aggregate market value of the voting common stock held by
non-affiliates of the registrant on July 29, 2006 was
$10,966,329,516, based on the closing sale price as reported on
the New York Stock Exchange.

There were 453,649,813 shares of the registrants
common stock, $1.00 par value, outstanding as of
January 27, 2007.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement to be filed with the Securities
and Exchange Commission in connection with the Annual Meeting of
Stockholders to be held on June 5, 2007 (Part III).

We are the leading off-price retailer of apparel and home
fashions in the United States and worldwide. Our T.J. Maxx,
Marshalls and A.J. Wright chains in the United States, our
Winners chain in Canada, and our T.K. Maxx chain in Europe sell
off-price family apparel and home fashions. Our HomeGoods chain
in the United States and our HomeSense chain, operated by
Winners in Canada, sell off-price home fashions. The target
customer for all of our off-price chains, except A.J. Wright, is
the middle-to upper-middle income shopper, with the same profile
as a department or specialty store customer. A.J. Wright targets
the moderate-income customer. Our seven off-price chains are
synergistic in their philosophies and operating platforms. Our
eighth chain, Bobs Stores, was acquired in December 2003
and is a value-oriented, branded apparel chain based in the
Northeastern United States that offers casual, family apparel.
Bobs Stores target customer demographic spans the
moderate-to upper-middle income bracket.

Our off-price mission is to deliver an exciting, fresh and
rapidly changing assortment of brand-name merchandise at
excellent values to our customers. We define value as the
combination of quality, brand, fashion and price. With over 450
buyers and over 10,000 vendors worldwide and over 2,400 stores,
we believe we are well positioned to continue accomplishing this
goal. Our key strengths include:



expertise in off-price buying



substantial buying power



synergistic businesses with flexible business models



solid relationships with many manufacturers and other
merchandise suppliers



deep organization with decades of experience in off-price
retailing as well as other forms of retailing

As an off-price retailer, we offer quality, name brand and
designer family apparel and home fashions every day at
substantial savings to comparable department and specialty store
regular prices. We can offer these everyday savings as a result
of our opportunistic buying strategies, disciplined inventory
management, including rapid inventory turns, and low expense
structure.

In our off-price chains, we purchase the majority of our
inventory opportunistically. In contrast to traditional
retailers that order goods far in advance of the time they
appear on the selling floor, TJX buyers are in the marketplace
virtually every week, buying primarily for the current selling
season. By maintaining a liquid inventory position, our buyers
can buy close to need, enabling them to buy into current market
trends and take advantage of the opportunities in the
marketplace. Due to the unpredictable nature of consumer demand
in the highly fragmented apparel and home fashions marketplace
and the mismatch of supply and demand, we are regularly able to
buy the vast majority of our inventory directly from
manufacturers, with some merchandise coming from other retailers
and other sources. We purchase virtually all of our inventory
for our off-price stores at discounts from initial wholesale
prices. Although we generally purchase merchandise for our
off-price chains to sell in the current season, we purchase a
limited quantity of pack away merchandise that we buy
specifically to warehouse and sell in a future selling season.
We are willing to purchase less than a full assortment of styles
and sizes. We pay promptly and do not ask for typical retail
concessions in our off-price chains such as advertising,
promotional and markdown allowances, or delivery concessions
such as drop shipments to stores or delayed deliveries or return
privileges. Our financial strength, strong reputation and
ability to purchase large quantities of merchandise and sell it
through our geographically diverse network of stores provide us
excellent access to leading branded merchandise. Our
opportunistic buying permits us to consistently offer our
customers in our off-price chains a rapidly changing merchandise
assortment at everyday values that are below department and
specialty store regular prices.

We are extremely disciplined in our inventory management, and we
rapidly turn the inventory in our off-price chains. We rely
heavily on sophisticated, internally developed inventory systems
and controls that permit a virtually continuous flow of
merchandise into our stores and an expansive distribution
infrastructure that supports our
close-to-need
buying by delivering goods to our stores quickly and
efficiently. For example, highly automated storage and
distribution systems track, allocate and deliver an average of
approximately 11,000 items per week to each T.J. Maxx and
Marshalls store. In addition, specialized computer inventory
planning, purchasing and monitoring systems,

2

coupled with warehouse storage, processing, handling and
shipping systems, permit a continuous evaluation and rapid
replenishment of store inventory. Pricing, markdown decisions
and store inventory replenishment requirements are determined
centrally, using information provided by
point-of-sale
computer terminals and are designed to move inventory through
our stores in a timely and disciplined manner. These inventory
management and distribution systems allow us to achieve rapid
in-store inventory turnover on a vast array of product and sell
substantially all merchandise within targeted selling periods.

We operate with a low cost structure relative to many other
retailers. Our stores are generally located in community
shopping centers. While we seek to provide a pleasant, easy
shopping environment with emphasis on customer convenience, we
do not spend heavily on store fixtures. Our selling floor space
is flexible, without walls between departments and largely free
of permanent fixtures, so we can easily expand and contract
departments in response to customer demand and available
merchandise. Also, our large retail presence, strong financial
position and expertise in the real estate market allow us
generally to obtain favorable lease terms. In our off-price
chains, our advertising budget as a percentage of sales remains
low compared to traditional department and specialty stores,
although we increased our advertising and other marketing
spending in fiscal 2007 as compared to prior years. Our high
sales-per-square-foot
productivity and rapid inventory turnover also provide expense
efficiencies.

With all of our off-price chains operating with the same
off-price strategies and systems, we are able to capitalize upon
expertise, best practices and new ideas across our chains,
develop associates by transferring them from one chain to
another, and grow our various businesses more efficiently and
effectively.

During the fiscal year ended January 27, 2007, we derived
78% of our sales from the United States (28% from the Northeast,
14% from the Midwest, 23% from the South, and 13% from the
West), 21% from foreign countries (10% from Canada, 11% from
Europe (the United Kingdom and Ireland)), and 1% from Puerto
Rico. By merchandise category, we derived approximately 63% of
our sales from apparel (including footwear), 25% from home
fashions and 12% from jewelry and accessories.

We consider each of our operating divisions to be a segment. The
T.J. Maxx and Marshalls store chains are managed as one
division, referred to as Marmaxx, and are reported as a single
segment. The Winners and HomeSense chains, which operate
exclusively in Canada, are also managed as one division and are
reported as a single segment. Each of our other store chains,
T.K. Maxx, HomeGoods, A.J. Wright, and Bobs Stores is
operated as a division and reported as a separate segment. More
detailed information about our segments, including financial
information for each of the last three fiscal years, can be
found in Note O to the consolidated financial statements.

Unless otherwise indicated, all store information is as of
January 27, 2007, and references to store square footage
are to gross square feet. Fiscal 2005 means the fiscal year
ended January 29, 2005, fiscal 2006 means the fiscal year
ended January 28, 2006, fiscal 2007 means the fiscal year
ended January 27, 2007 and fiscal 2008 means the fiscal
year ending January 26, 2008.

SEGMENT OVERVIEW

Marmaxx (T.J. Maxx and Marshalls)

Marmaxx operates both the T.J. Maxx and Marshalls store chains.
T.J. Maxx is the largest off-price retail chain in the United
States, with 821 stores in 48 states at fiscal 2007 year
end. Marshalls is the second-largest off-price retailer in the
United States, with 734 stores in 42 states, as well as 14
stores in Puerto Rico, at that date. We maintain the separate
identities of the T.J. Maxx and Marshalls stores through product
assortment and merchandising, marketing and store appearance.
This encourages our customers to shop at both chains.

T.J. Maxx and Marshalls primarily target female shoppers who
have families with middle to upper-middle incomes and who
generally fit the profile of a department or specialty store
customer. These chains operate with a common buying and
merchandising organization and have a consolidated
administrative function, including finance and human resources.
The combined organization, known internally as The Marmaxx
Group, offers us increased leverage to purchase merchandise at
favorable prices and allows us to operate with a lower cost
structure. These advantages are key to our ability to sell
quality, brand name merchandise at substantial discounts from
department and specialty store regular prices.

fashions. Within these broad categories, T.J. Maxx offers a shoe
assortment for women and fine jewelry, while Marshalls offers a
full-line footwear department and a larger mens
department. In fiscal 2007, T.J. Maxx substantially completed
the roll out of the expanded jewelry and accessories departments
to existing stores and Marshalls continued to add expanded
footwear departments. We believe these expanded offerings
further differentiate the shopping experience at T.J. Maxx and
Marshalls, driving traffic to both chains. We expect to add
approximately 200 expanded footwear departments in the Marshalls
stores in fiscal 2008, and at T.J. Maxx, we will continue to add
expanded jewelry and accessories departments in new stores,
relocated stores and selectively, to existing stores.

T.J. Maxx and Marshalls stores are generally located in suburban
community shopping centers. T.J. Maxx stores average
approximately 30,000 square feet. Marshalls stores average
approximately 32,000 square feet. We currently expect to add a
net of 50 stores in fiscal 2008. Ultimately, we believe that
T.J. Maxx and Marshalls together can operate approximately 1,800
stores in the United States and Puerto Rico.

HomeGoods

HomeGoods is our off-price retail chain that sells exclusively
home fashions with a broad array of giftware, home basics,
accent furniture, lamps, rugs, accessories, childrens
furniture, and seasonal merchandise for the home. Many of the
HomeGoods stores are stand-alone stores; however, we also
combine HomeGoods stores with a T.J. Maxx or Marshalls store in
a superstore format, the majority of which are dual-branded,
with both the T.J. Maxx or Marshalls logo and the HomeGoods
logo. We count the superstores as both a T.J. Maxx or Marshalls
store and a HomeGoods store. In fiscal 2007, we continued to
open a different superstore format, called a combo
store, in which a HomeGoods store is located beside a T.J.
Maxx or Marshalls store, with interior passageways providing
access between the stores. This configuration is also
dual-branded with both the T.J. Maxx or Marshalls logo and the
HomeGoods logo.

Stand-alone HomeGoods stores average approximately 27,000 square
feet. In superstores, which average approximately 53,000 square
feet, we dedicate an average of 22,000 square feet to HomeGoods.
The 270 stores open at the end of fiscal 2007 include 147
stand-alone stores, 105 superstores and 18 combo stores. In
fiscal 2008, we plan to net 12 additional stores, including
1 superstore. We believe that the U.S. market could potentially
support approximately 500 to 600 HomeGoods stores in the long
term.

Winners and HomeSense

Winners is the leading off-price retailer in Canada, offering
off-price brand name and designer womens apparel,
lingerie, accessories, home fashions, giftware, fine jewelry,
menswear, childrens clothing, and family footwear. Winners
operates HomeSense, our Canadian off-price home-fashions chain,
launched in fiscal 2001. Like our HomeGoods chain, HomeSense
offers a wide and rapidly changing assortment of off-price home
fashions including giftware, accent furniture, lamps, rugs,
accessories and seasonal merchandise. We operate HomeSense in a
stand-alone format, as well as a superstore format where a
HomeSense store and a Winners store are combined or operate
side-by-side.

At fiscal 2007 year end, we operated 184 Winners stores,
which averaged approximately 29,000 square feet and
68 HomeSense stores, which averaged approximately 24,000
square feet. We expect to add a net of 4 Winners stores and
3 HomeSense stores in fiscal 2008, in both the stand-alone
and superstore format. Ultimately, we believe the Canadian
market can support approximately 200 Winners stores and
approximately 80 HomeSense stores.

T.K. Maxx

T.K. Maxx, operating in the United Kingdom and Ireland, is the
only major off-price retailer in any European country. T.K. Maxx
utilizes the same off-price strategies employed by T.J. Maxx,
Marshalls and Winners, and offers the same types of merchandise.
At the end of fiscal 2007, we operated 210 T.K. Maxx stores
which averaged approximately 30,000 square feet. We expect to
add a total of 10 stores in the United Kingdom and Ireland in
fiscal 2008 and believe that the U.K. and Ireland can support
approximately 275 stores in the long term. In addition, in the
fall of fiscal 2008, we expect to open 5 T.K. Maxx stores in
Germany.

A.J. Wright

A.J. Wright offers our off-price concept to the moderate income
customer demographic, which differentiates this chain from our
other off-price divisions. A.J. Wright stores offer brand-name
family apparel, accessories, footwear, domestics, gift ware,
including toys and games, and special, opportunistic purchases.
A.J. Wright stores average approximately 26,000 square feet. We
operated 129 A.J. Wright stores in the United States at fiscal
2007 year end.

4

During the fourth quarter of fiscal 2007, we identified 34
underperforming stores to close, as part of a plan to reposition
A.J. Wright for future profitable growth. Virtually all of these
stores were closed at the end of fiscal 2007. The cost to close
these stores as well as the operating income or loss of these
stores (in the current and prior periods) has been reported in
our financial statements as a discontinued operation. In fiscal
2008, we anticipate opening 5 stores in existing markets as we
focus on improving performance, both in our existing store base
and in opening new stores. In the long term, we believe that the
U.S. could potentially support approximately 1,000 A.J. Wright
stores.

Bobs Stores

Bobs Stores, acquired in late 2003, offers casual, family
apparel and footwear, including workwear, activewear, and
licensed team apparel. Bobs Stores customer
demographics span the moderate to upper-middle income bracket.
Bobs Stores operated 36 stores at the end of fiscal 2007,
with an average size of 45,000 square feet. We do not plan to
open any new stores for this division in fiscal 2008 as we
continue to evaluate this business and focus on improving
performance.

5

STORE LOCATIONS

We operated stores in the following locations as of
January 27, 2007:

T.J. Maxx*

Marshalls*

HomeGoods*

A. J. Wright

Bobs Stores

Alabama

16

6

2

-

-

Arizona

9

11

4

-

-

Arkansas

7

-

1

-

-

California

67

102

29

7

-

Colorado

11

8

2

-

-

Connecticut

25

23

10

5

13

Delaware

3

3

1

-

-

District of Columbia

1

-

-

1

-

Florida

55

59

23

2

-

Georgia

31

28

8

-

-

Idaho

5

1

1

-

-

Illinois

37

40

13

17

-

Indiana

17

10

1

8

-

Iowa

6

2

-

-

-

Kansas

6

3

1

-

-

Kentucky

9

4

3

2

-

Louisiana

7

9

-

-

-

Maine

7

3

3

-

-

Maryland

11

21

6

6

-

Massachusetts

47

48

21

18

12

Michigan

33

20

9

8

-

Minnesota

13

12

8

-

-

Mississippi

5

2

-

-

-

Missouri

13

12

6

-

-

Montana

3

-

-

-

-

Nebraska

3

2

-

-

-

Nevada

5

6

3

-

-

New Hampshire

14

9

5

1

3

New Jersey

31

39

21

6

4

New Mexico

3

2

-

-

-

New York

47

54

19

17

3

North Carolina

25

19

8

-

-

North Dakota

3

-

-

-

-

Ohio

38

16

9

9

-

Oklahoma

3

3

-

-

-

Oregon

7

4

1

-

-

Pennsylvania

40

30

8

7

-

Puerto Rico

-

14

7

-

-

Rhode Island

5

6

4

2

1

South Carolina

18

9

4

-

-

South Dakota

1

-

-

-

-

Tennessee

24

12

6

3

-

Texas

36

55

6

-

-

Utah

9

-

2

-

-

Vermont

4

1

1

-

-

Virginia

29

23

7

8

-

Washington

13

8

-

-

-

West Virginia

3

2

1

-

-

Wisconsin

15

7

6

2

-

Wyoming

1

-

-

-

-

Total Stores

821

748

270

129

36



Winners operated 184 stores in Canada (including the Winners
portion of a superstore): 22 in Alberta, 24 in British Columbia,
6 in Manitoba, 3 in New Brunswick, 2 in Newfoundland, 6 in Nova
Scotia, 85 in Ontario, 1 on Prince Edward Island, 32 in Quebec
and 3 in Saskatchewan.



HomeSense operated 68 stores in Canada (including the HomeSense
portion of a superstore): 8 in Alberta, 12 in British Columbia,
1 in Manitoba, 2 in New Brunswick, 2 in Nova Scotia, 35 in
Ontario and 8 in Quebec.



T.K. Maxx operated 202 stores in the United Kingdom and 8 stores
in the Republic of Ireland.

*

Includes T.J. Maxx, Marshalls or HomeGoods portion of a
superstore.

6

COMPUTER INTRUSION

We suffered an unauthorized intrusion into portions of our
computer systems that process and store information related to
customer transactions that we believe resulted in the theft of
customer data. We do not know who took this action and whether
there were one or more intruders involved (we refer to the
intruder or intruders collectively as the Intruder),
or whether there was one continuing intrusion or multiple,
separate intrusions (we refer to the intrusion or intrusions
collectively as the Computer Intrusion). We are
engaged in an ongoing investigation of the Computer Intrusion,
and the information provided in this
Form 10-K
is based on the information we have learned in our investigation
to the date of this
Form 10-K.
We do not know what, if any, additional information we will
learn in our investigation, but that information could
materially add to or change the information provided in this
Form 10-K.

Discovery of Computer Intrusion. On
December 18, 2006, we learned of suspicious software on our
computer systems. We immediately initiated an investigation, and
the next day, General Dynamics Corporation and International
Business Machines Corporation, leading computer security and
incident response firms, were engaged to assist in the
investigation. They determined on December 21, 2006 that
there was strong reason to believe that our computer systems had
been intruded upon and that an Intruder remained on our computer
systems. With the assistance of our investigation team, we
immediately began to design and implement a plan to monitor and
contain the ongoing Computer Intrusion, protect customer data
and strengthen the security of our computer systems against the
ongoing Computer Intrusion and possible future attacks.

On December 22, 2006, we notified law enforcement officials
of the suspected Computer Intrusion and later that day met with
representatives of the U.S. Department of Justice,
U.S. Secret Service and U.S. Attorney, Boston Office
to brief them. At that meeting, the U.S. Secret Service
advised us that disclosure of the suspected Computer Intrusion
might impede their criminal investigation and requested that we
maintain the confidentiality of the suspected Computer Intrusion
until law enforcement determined that disclosure would no longer
compromise the investigation.

With the assent of law enforcement, on December 26 and
December 27, 2006, we notified our contracting banks and
credit and debit card and check processing companies of the
suspected Computer Intrusion (we refer to credit and debit cards
as payment cards). On December 27, 2006, we
first determined that customer information had apparently been
stolen from our computer systems in the Computer Intrusion. On
January 3, 2007, we, together with the U.S. Secret
Service, met with our contracting banks and payment card and
check processing companies to discuss the Computer Intrusion.

Prior to the public release of information with respect to the
Computer Intrusion, we provided information on the Computer
Intrusion to the U.S. Federal Trade Commission,
U.S. Securities & Exchange Commission, Royal
Canadian Mounted Police and Canadian Federal Privacy
Commissioner. Upon the public release, we also provided
information to the Massachusetts and other state Attorneys
General, California Office of Privacy Protection, various
Canadian Provincial Privacy Commissioners, the U.K. Information
Commissioner, and the Metropolitan Police in London, England.

On January 13, 2007, we determined that additional customer
information had apparently been stolen from our computer systems.

On January 17, 2007, we publicly announced the Computer
Intrusion and thereafter we expanded our forensic investigation
of the Computer Intrusion.

On February 18, 2007, in the course of our ongoing
investigation, we found evidence that the Computer Intrusion may
have been initiated earlier than previously reported and that
additional customer information potentially had been stolen. On
February 21, 2007, we publicly announced additional
findings on the timing and scope of the Computer Intrusion.

Timing of Computer Intrusion. Based on our
investigation to date, we believe that our computer systems were
first accessed by an unauthorized Intruder in July 2005, on
subsequent dates in 2005 and from mid-May 2006 to mid-January
2007, but that no customer data were stolen after
December 18, 2006.

Systems Affected in the Computer Intrusion. We
believe that information was stolen in the Computer Intrusion
from a portion of our computer systems in Framingham, MA that
processes and stores information related to payment card, check
and unreceipted merchandise return transactions for customers of
our T.J. Maxx, Marshalls, HomeGoods and A.J. Wright stores in
the U.S. and Puerto Rico and our Winners and HomeSense stores in
Canada (Framingham

7

system) and from a portion of our computer systems in
Watford, U.K. that processes and stores information related to
payment card transactions at T.K. Maxx in the United Kingdom and
Ireland (Watford system). We do not believe that the
Computer Intrusion affected the portions of our computer systems
handling transactions for customers of Bobs Stores, or
check and merchandise return transactions at T.K. Maxx. We do
not believe that customer personal identification numbers (PINs)
were compromised, because, before storage on the Framingham
system, they are separately encrypted in U.S., Puerto Rican and
Canadian stores at the PIN pad, and because we do not store PINs
on the Watford system. We do not believe that information from
transactions using debit cards issued by Canadian banks at
Winners and HomeSense that were transacted through the Interac
network was compromised. Although we believe that information
from transactions at our U.S. stores (other than Bobs
Stores) using Canadian debit cards that were transacted through
the NYCE network were processed and stored on the Framingham
system, we do not believe the PINs required to use these
Canadian debit cards were compromised in the Computer Intrusion.
We do not process or store names or addresses on the Framingham
system in connection with payment card or check transactions.

Customer Information Believed Stolen. We have
sought to identify customer information stolen in the Computer
Intrusion. To date, we have been able to identify only some of
the information that we believe was stolen. Prior to discovery
of the Computer Intrusion, we deleted in the ordinary course of
business the contents of many files that we now believe were
stolen. In addition, the technology used by the Intruder has, to
date, made it impossible for us to determine the contents of
most of the files we believe were stolen in 2006. Given the
scale and geographic scope of our business and computer systems
and the time frames involved in the Computer Intrusion, our
investigation has required a substantial period of time to date
and is not completed. We are continuing to try to identify
information stolen in the Computer Intrusion through our
investigation, but, other than the information provided below,
we believe that we may never be able to identify much of the
information believed stolen.

Based on our investigation, we have been able to determine some
details about information processed and stored on the Framingham
system and the Watford system. Customer names and addresses were
not included with the payment card data believed stolen for any
period, because we do not process or store that information on
the Framingham system or Watford system in connection with
payment card transactions. In addition, for transactions after
September 2, 2003, we generally no longer stored on our
Framingham system the security data included in the magnetic
stripe on payment cards required for card present transactions
(track 2 data), because those data generally were
masked (meaning permanently deleted and replaced with
asterisks). Also, by April 3, 2006, our Framingham system
generally also masked payment card PINs, some other portions of
payment card transaction information, and some portions of check
transaction information. For transactions after April 7,
2004 our Framingham system also generally began encrypting
(meaning substituted characters for the actual characters using
an encryption algorithm provided by our software vendor) all
payment card and check transaction information. With respect to
the Watford system, masking and encryption practices were
generally implemented at various points in time for various
portions of the payment card data.

Until discovery of the Computer Intrusion, we stored certain
customer personal information on our Framingham system that we
received in connection with returns of merchandise without
receipts and in some check transactions in our U.S., Puerto
Rican and Canadian stores (other than Bobs Stores). In
some cases, this personal information included drivers
license, military and state identification numbers (referred to
as personal ID numbers), together with related names
and addresses, and in some of those cases, we believe those
personal ID numbers were the same as the customers social
security numbers. After April 7, 2004, we generally
encrypted this personal information when stored on our
Framingham system. We do not process or store information
relating to check or merchandise return transactions or customer
personal information on the Watford system.

Information Believed Stolen in 2005. As we
previously publicly reported, we believe customer data were
stolen in September and November 2005 relating to a portion of
the payment card transactions made at our stores in the U.S.,
Puerto Rico and Canada (excluding transactions at Bobs
Stores and transactions made at Winners and HomeSense through
the Interac network with debit cards issued by Canadian banks)
during the period from December 31, 2002 through
June 28, 2004. We suspect the data believed stolen in 2005
related to somewhere between approximately half to substantially
all of the transactions at U.S., Puerto Rican and Canadian
stores during the period from December 31, 2002 through
June 28, 2004 (excluding transactions at Bobs Stores
and transactions made at Winners and HomeSense through the
Interac network with debit cards issued by Canadian banks). The
data were included in files routinely created on our Framingham
system to store customer data, but the contents of many of the
files were deleted in the ordinary course of business prior to
discovery of the Computer Intrusion. Through our investigation
to date, we have

8

identified the information set forth in the following chart with
respect to the approximate number of payment cards for which
information is believed to have been stolen in this period:

Transaction Period

4/8/04  6/28/04

Card Data

12/31/02  11/23/03

11/24/03  4/7/04

Encrypted and

Track 2 Data

Track 2 Data

Track 2 Data

Payment Card Status at

Masked

All Card

Masked

All Card

Masked

All Card

Time of Believed Theft

(Not Stored)

Data Clear

(Not Stored)

Data Clear

(Not Stored)

Data Clear

(in thousands)

Cards Expired

5,600

25,000

Number
Unknown(1

)

None

Number
Unknown(1

)

None

Cards Unexpired

3,800

11,200

Number
Unknown(1

)

None

Number
Unknown(1

)

None

(1)

Substantially all stolen data from
these periods were deleted in the ordinary course of business
subsequent to the believed theft but prior to discovery of
Computer Intrusion. We have not sought to decrypt encrypted data
that was not deleted.

Customer names and addresses and, for transactions after
September 2, 2003, track 2 data were not included in the
payment card information believed stolen in 2005. We do not
believe that customer PINs were compromised.

In addition, we believe that personal information provided in
connection with a portion of the unreceipted merchandise return
transactions at T.J. Maxx, Marshalls, and HomeGoods stores in
the U.S. and Puerto Rico, primarily during the last four months
of 2003 and May and June 2004, was also stolen in 2005. The
information we are able to specifically identify was from 2003
and included personal ID numbers, together with the related
names and/or
addresses, of approximately 451,000 individuals. We are in the
process of notifying these individuals directly by letter.

Information Believed Stolen in 2006. As
previously publicly reported, we identified a limited number of
payment cards as to which transaction information was included
in the customer data that we believe were stolen in 2006. This
information was contained in two files apparently created in
connection with computer systems problems in 2004 and 2006.
Through our investigation to date, we have identified the
following information with respect to the approximate number of
payment cards for which unencrypted information was included in
these files:

Track 2 Data

Card Status at Date of

Masked

All Card

Believed Theft

(Not Stored)

Data Clear

(in thousands)

Cards Expired

23

85

Cards Unexpired

20

4

Customer names and addresses were not included with the payment
card information in these files. We do not believe that customer
PINs were compromised. Some of the payment card data contained
in these files were encrypted; we have not sought to decrypt
these data.

In addition, the two files contained the personal ID numbers,
together with the related names
and/or
addresses, of approximately 3,600 individuals, and we sent
notice directly to these individuals.

We also have located a third file created in the ordinary course
that we believe was stolen by the Intruder in 2006 and that we
believe contained customer data. All of the data in this file
are encrypted, and we have not sought to decrypt them.

As previously publicly reported, we believe that in 2006 the
Intruder may also have stolen from our Framingham system
additional payment card, check and unreceipted merchandise
return information for transactions made in our stores in the
U.S., Canada, and Puerto Rico (excluding transactions at
Bobs Stores and transactions made at Winners and HomeSense
through the Interac network with debit cards issued by Canadian
banks) during portions of mid-May through December 18,
2006. Through our investigation, we have identified
approximately 100 files that we believe the Intruder, during
this period, stole from our Framingham system (the vast majority
of which we believe the Intruder created) and that we suspect
included customer data. However, due to the technology utilized
by the Intruder, we are unable to determine the nature or extent
of information included in these files. Despite our masking and
encryption practices on our Framingham system in 2006, the
technology utilized in the Computer Intrusion during 2006 could
have enabled the Intruder to steal payment card data from our
Framingham system during the payment card issuers approval
process, in which data (including the track 2 data) is
transmitted to payment card issuers without encryption.
Further, we believe that the Intruder had access to the
decryption tool for the encryption software utilized by TJX. The

9

approximately 100 files stolen in 2006 could have included the
data that we believe were stolen in 2005, as well as other data
relative to some customer transactions from December 31,
2002 through mid-May 2006, although, with respect to
transactions after September 2, 2003 generally without
track 2 data, and, with respect to transactions after
April 7, 2004, generally with all data encrypted.

In addition, as previously publicly reported, we suspect that
customer data for payment card transactions at T.K. Maxx stores
in the U.K. and Ireland has been stolen. In that regard, we now
believe that at least two files of the approximately 100 files
identified above that the Intruder stole from the Framingham
system in 2006 were created by the Intruder and moved from the
Watford system to the Framingham system. We suspect that these
files contained payment card transaction data, some or all of
which could have been unencrypted and unmasked. However, due to
the technology utilized by the Intruder in the Computer
Intrusion, we are unable to determine the nature or extent of
information included in these files. Further, the technology
utilized by the Intruder in the Computer Intrusion during 2006
on the Watford system could also have enabled the Intruder to
steal payment card data from the Watford system during the
payment card issuers approval process, in which data
(including the track 2 data) are transmitted to payment card
issuers without encryption.

We have provided extensive payment card transaction information
to the banks and payment card companies with which we contract
as requested by them. While we have been advised by law
enforcement authorities that they are investigating fraudulent
use of payment card information believed stolen from TJX, we do
not know the extent of any fraudulent use of such information.
Some banks and payment card companies have advised us that they
have found what they consider to be preliminary evidence of
possible fraudulent use of payment card information that may
have been stolen from us, but they have not shared with us the
details of their preliminary findings. We also do not know the
extent of any fraudulent use of any of the personal information
believed stolen. Certain banks have sought, and other banks and
payment card companies may seek, either directly against us or
through claims against our acquiring banks as to which we may
have an indemnity obligation, payment of or reimbursement for
fraudulent card charges and operating expenses (such as costs of
replacing
and/or
monitoring payment cards thought by them to have been placed at
risk by the Computer Intrusion) that they believe they have
incurred by reason of the Computer Intrusion. In addition,
payment card companies and associations may seek to impose fines
by reason of the Computer Intrusion.

Financial Costs. In the fourth quarter of
fiscal 2007, we recorded a pre-tax charge of approximately
$5 million, or $.01 per share, for costs incurred
through the fourth quarter in connection with the Computer
Intrusion, which includes costs incurred to investigate and
contain the Computer Intrusion, strengthen computer security and
systems, and communicate with customers, as well as technical,
legal, and other fees. Beyond this charge, we do not have enough
information to reasonably estimate losses we may incur arising
from the Computer Intrusion. Various litigation has been or may
be filed, and various claims have been or may be otherwise
asserted, against us
and/or our
acquiring banks, on behalf of customers, banks,
and/or card
companies seeking damages allegedly arising out of the Computer
Intrusion and other related relief. We intend to defend such
litigation and claims vigorously, although we cannot predict the
outcome of such litigation and claims. Various governmental
entities are investigating the Computer Intrusion, and although
we are cooperating in such investigations, we may be subject to
fines or other obligations. (See Item 3 with respect to
litigation and investigations.) Losses that we may incur as a
result of the Computer Intrusion include losses arising out of
claims by payment card associations and banks, customers,
shareholders, governmental entities and others; technical,
legal, computer systems and other expenses; and other potential
liabilities, costs and expenses. Such losses could be material
to our results of operation and financial condition.

Future Actions. We are continuing our forensic
investigation of the Computer Intrusion and our ongoing program
to strengthen and protect our computer systems. We are
continuing to communicate with our customers about the Computer
Intrusion. We are continuing to cooperate with law enforcement
in its investigation of these crimes and with the payment card
companies and associations and our acquiring banks. We are also
continuing to cooperate with governmental agencies in their
investigations of the Computer Intrusion. We are vigorously
defending the litigation and claims asserted against us with
respect to the Computer Intrusion.

OTHER
INFORMATION

Employees

At January 27, 2007, we had approximately 125,000
employees, many of whom work less than 40 hours per week. In
addition, we hire temporary employees during the peak
back-to-school
and holiday seasons.

10

Credit

Our stores operate primarily on a
cash-and-carry
basis. Each chain accepts credit sales through programs offered
by banks and others. We do not operate our own customer credit
card program or maintain customer credit receivables. Our
co-branded TJX card program for our domestic divisions offered
by a major bank expired February 1, 2007, as scheduled. We
plan to offer a new co-branded TJX credit card program with a
different major bank in fiscal 2008. The rewards program
associated with these programs is partially funded by TJX.

Buying and Distribution

We operate a centralized buying organization that services both
the T.J. Maxx and Marshalls chains, while each of our other
chains has its own centralized buying organization. All of our
chains are serviced through their own distribution networks
which includes the use of third party providers at our HomeGoods
division.

Trademarks

Our principal trademarks and service marks, which are T.J. Maxx,
Marshalls, HomeGoods, Winners, HomeSense, T.K. Maxx, A.J. Wright
and Bobs Stores, are registered in relevant countries. Our
rights in these trademarks and service marks endure for as long
as they are used.

Seasonality

Our business is subject to seasonal influences, which causes us
generally to realize higher levels of sales and income in the
second half of the year. This is common in the apparel retail
business.

Competition

The retail apparel and home fashion business is highly
competitive. We compete on the basis of fashion, quality, price,
value, merchandise selection and freshness, brand name
recognition and, to a lesser degree, store location. We compete
with local, regional, national and international department,
specialty, off-price, discount and outlet stores as well as
other retailers that sell apparel, home fashions and other
merchandise that we sell, whether in stores, through catalogues
or media or over the internet. We purchase most of our inventory
opportunistically and compete for that merchandise with other
off-price apparel and outlet retailers. We also compete with
other retailers for store locations.

SEC Filings and Certifications

Copies of our annual reports on
Form 10-K,
proxy statements, quarterly reports on
Form 10-Q
and current reports on
Form 8-K,
and any amendments to those filings pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the Exchange Act), are available
free of charge on our website, www.tjx.com, under SEC
Filings, as soon as reasonably practicable after they are
filed electronically with the Securities and Exchange Commission
(the SEC). They are also available free of charge
from TJX Investor Relations, 770 Cochituate Road, Framingham,
Massachusetts, 01701.

The Annual CEO Certification for the fiscal year ended
January 28, 2006, as required by Section 303A.12(a) of
the Listed Company Manual of the New York Stock Exchange
(NYSE), regarding our compliance with the corporate
governance listing standards of the NYSE, was submitted to the
NYSE on June 29, 2006.

We have filed the Sarbanes-Oxley Act Section 302
Certifications as an exhibit to this
Form 10-K.

ITEM 1A.

Risk Factors

The statements in this Section describe the major risks to our
business and should be considered carefully, in connection with
all of the other information set forth in this annual report on
Form 10-K.
In addition, these statements constitute our cautionary
statements under the Private Securities Litigation Reform Act of
1995.

Our disclosure and analysis in this 2006
Form 10-K
and in our 2006 Annual Report to Shareholders contain some
forward-looking statements, including some of the statements
made under Item 1, Business, Item 7,
Managements Discussion and Analysis of Financial
Condition and Results of Operations, and Item 8,
Financial Statements and Supplementary Data, and in
our 2006 Annual Report to Stockholders under Letter to
Shareholders and Financial Graphs. From time
to time, we also provide forward-looking statements in other
materials we release to the public as well as oral
forward-looking statements. Such statements give our current
expectations or forecasts of future events;

11

they do not relate strictly to historical or current facts. We
have generally identified such statements by using words such as
anticipate, estimate,
expect, project, intend,
plan, believe, will,
target, forecast and similar expressions
in connection with any discussion of future operating or
financial performance. All statements that address activities,
events or developments that we intend, expect or believe may
occur in the future are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. In
particular, these include statements relating to future actions,
future performance or results of current and anticipated sales,
expenses, interest rates, foreign exchange rates, the outcome of
contingencies, such as legal proceedings, and financial results.

We cannot guarantee that any forward-looking statement will be
realized. Achievement of future results is subject to risks,
uncertainties and potentially inaccurate assumptions. Should
known or unknown risks or uncertainties materialize, or should
underlying assumptions prove inaccurate, actual results could
differ materially from past results and those anticipated,
estimated or projected. You should bear this in mind as you
consider forward-looking statements.

We undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future
events or otherwise. You are advised, however, to consult any
further disclosures we make on related subjects in our
Form 10-Q
and 8-K
reports to the SEC. The risks that follow, individually or in
the aggregate, are those that we think could cause our actual
results to differ materially from those stated or implied in
forward-looking statements. You should understand that it is not
possible to predict or identify all such factors. Consequently,
you should not consider the following to be a complete
discussion of all potential risks or uncertainties.

Our
revenue growth could be adversely affected if we do not continue
to expand our operations successfully.

We have steadily expanded the number of chains and stores we
operate and our selling square footage. Our revenue growth is
dependent upon our ability to continue to expand successfully
through new store openings as well as our ability to increase
same store sales. Successful store growth requires selection of
store locations in appropriate geographies, availability of
attractive stores or store sites in such locations and
negotiation of acceptable terms. Competition for desirable sites
and increases in real estate, construction and development costs
could limit our growth opportunities. Even if we succeed in
opening new stores, these new stores may not achieve the same
sales or profit levels as our existing stores. Further,
expansion places demands upon us to manage rapid growth, and we
may not do so successfully.

Our
quarterly operating results can be subject to significant
fluctuations and may fall short of either a prior quarter or
investors expectations.

Our operating results have fluctuated from quarter to quarter in
the past, and we expect that they will continue to do so in the
future. Our earnings may not continue to grow at rates similar
to the growth rates achieved in recent years and may fall short
of either a prior quarter or investors expectations.
Factors that could cause these quarterly fluctuations include
some factors that are within our control such as the execution
of our off-price buying; selection, pricing, flow and mix of
merchandise; and inventory management including markon and
markdowns; and some factors that are not within our control
including actions of competitors; weather conditions; economic
conditions and consumer confidence; and seasonality. In
addition, if we do not repurchase, or are unable to repurchase,
the number of shares we contemplate pursuant to our stock
repurchase program, our earnings per share may be adversely
affected. Most of our operating expenses, such as rent expense
and associate salaries, do not vary directly with the amount of
sales and are difficult to adjust in the short term. As a
result, if sales in a particular quarter are below expectations
for that quarter, we may not proportionately reduce operating
expenses for that quarter, and therefore such a sales shortfall
would have a disproportionate effect on our net income for the
quarter. We maintain a forecasting process that seeks to project
sales and align expenses. If management fails to correctly
forecast changes or appropriately adjust the business plan in
light of results, our financial performance could be adversely
affected.

We may
have difficulty extending our off-price model in new product
lines, chains and geographic regions.

We have expanded our original off-price model into different
product lines, chains, geographic areas and countries. Our
growth is dependent upon our ability to successfully execute our
off-price retail apparel and home fashions concepts in new
markets and geographic regions. If we are unable to successfully
execute our concepts in these

12

new markets and regions, or if consumers there are not receptive
to the concepts, our financial performance could be adversely
affected.

If we
fail to execute our opportunistic buying and inventory
management well, our business could be adversely
affected.

We purchase the majority of our inventory opportunistically with
our buyers purchasing close to need. To drive traffic to the
stores and to increase same store sales, the treasure hunt
nature of the off-price buying experience requires continued
replenishment of fresh high quality, attractively priced
merchandise. While opportunistic buying enables our buyers to
buy at the right time and price, in the quantities we need and
into market trends, it places considerable discretion in our
buyers, subjecting us to risks on the timing, quantity and
nature of inventory flowing to the stores. We rely on our
expansive distribution infrastructure to support delivering
goods to our stores on time. We must effectively and timely
distribute inventory to stores, maintain an appropriate mix and
level of inventory and effectively manage pricing and markdowns.
Failure to acquire and manage our inventory well and to operate
our distribution infrastructure effectively could adversely
affect our performance and our relationship with our customers.

Our
success depends upon our marketing, advertising and promotional
efforts. If we are unable to implement them successfully, or if
our competitors are more effective than we are, our revenue may
be adversely affected.

We use marketing and promotional programs to attract customers
to our stores and to encourage purchases by our customers. We
use various media for our promotional efforts, including print,
television, database marketing and direct marketing. If we fail
to choose the appropriate medium for our efforts, or fail to
implement and execute new marketing opportunities, our
competitors may be able to attract some of our customers and
cause them to decrease purchases in our stores and increase
purchases elsewhere, which might negatively impact our revenues.
Changes in the amount and degree of promotional intensity or
merchandising strategy by our competitors could cause us to have
difficulties in retaining existing customers and attracting new
customers.

We have
expended and expect to expend significant time and money as a
result of the Computer Intrusion we suffered, and as a result of
the Computer Intrusion, we could incur material losses, and our
reputation and business could be materially harmed.

We suffered the Computer Intrusion in which we believe that
customer data were stolen. We are conducting an investigation of
the Computer Intrusion. To date, we have been able to identify
only some of the information that we believe was stolen.
Deletions in the ordinary course of business prior to discovery
of the Computer Intrusion and the technology used by the
Intruder have, to date, made it impossible for us to determine
much of the information we believe was stolen, and we believe
that we may never be able to identify much of that information.
Further, we cannot predict whether we will learn information in
addition to or different from the information that we now
believe about the Computer Intrusion and the data believed
stolen.

While we have been advised by law enforcement authorities that
they are investigating fraudulent use of payment card
information believed stolen from TJX, we do not know the extent
of any fraudulent use of such information. Some banks and
payment card companies have advised us that they have found what
they consider to be preliminary evidence of possible fraudulent
use of credit payment card information that may have been stolen
from us, but they have not shared with us the details of their
preliminary findings. We also do not know the extent of any
fraudulent use of any of the personal information believed
stolen. There could be significant fraudulent use of the
information believed stolen from us.

We have incurred capital and other costs to investigate and
contain the Computer Intrusion, strengthen our computer security
and systems, and communicate with customers, as well as legal,
technical and other fees, and we expect to continue to incur
significant costs for these purposes. Certain banks have sought,
and other banks and payment card companies may seek, either
directly against us or through claims against our acquiring
banks as to which we may have an indemnity obligation, payment
of or reimbursement for fraudulent card charges and operating
expenses (such as costs of replacing
and/or
monitoring payment cards thought by them to have been placed at
risk by the Computer Intrusion) that they believe they have
incurred by reason of the Computer Intrusion. In addition,
payment card companies and associations may seek to impose fines
by reason of the Computer Intrusion.

Various litigation has been or may be filed, and various claims
have been or may be otherwise asserted, against us
and/or our
acquiring banks for which we may be responsible, on behalf of
customers, banks, payment card companies

13

and shareholders seeking damages allegedly arising out of the
Computer Intrusion and other related relief. We intend to defend
such litigation and claims vigorously, although we cannot
predict the outcome of such litigation and claims. Various
governmental entities are investigating the Computer Intrusion,
and although we are cooperating in such investigations, we may
be subject to fines or other obligations. We cannot predict what
actions such governmental entities will take and what the
consequences will be for us. The ultimate resolution of such
litigation, claims and investigations could have a material
adverse effect on our results of operations and financial
condition. Regardless of the merits and ultimate outcome of
these matters, litigation and proceedings of this type are
expensive to respond to and defend, and we could devote
substantial resources and time to responding to and defending
them.

Beyond the charge we took in the fourth quarter of fiscal 2007,
we do not have enough information to reasonably estimate losses
we may incur arising from the Computer Intrusion. These losses
may include losses arising out of claims by payment card
companies and banks, customers, shareholders and governmental
entities; technical, legal, computer system and other expenses;
and other potential liabilities, costs and expenses. Such losses
could be material to our results of operations and financial
condition. Further, the publicity associated with the Computer
Intrusion could materially harm our business and relationships
with customers.

Since discovering the Computer Intrusion, we have taken steps
designed to strengthen the security of our computer systems and
protocols and have instituted an ongoing program to continue to
do so. Nevertheless, there can be no assurance that we will not
suffer a future data compromise. We rely on commercially
available systems, software, tools and monitoring to provide
security for processing, transmission and storage of
confidential customer information, such as payment card and
personal information. We believe that the Intruder had access to
the decryption algorithm for the encryption software we utilize.
Further, the systems currently used for transmission and
approval of payment card transactions, and the technology
utilized in payment cards themselves, all of which can put
payment card data at risk, are determined and controlled by the
payment card industry, not by us. Improper activities by third
parties, advances in computer and software capabilities and
encryption technology, new tools and discoveries and other
events or developments may facilitate or result in a further
compromise or breach of our computer systems. Any such further
compromises or breaches could cause interruptions in our
operations, damage to our reputation and customers
willingness to shop in our stores and subject us to additional
costs and liabilities.

Our
business is subject to seasonal influences and a decrease in
sales or margins during the second half of the year could
adversely affect our operating results.

Our business is subject to seasonal influences; we realize
higher levels of sales and income in the second half of the
year. Any decrease in sales or margins during this period could
have a disproportionate effect on our financial condition and
results of operations.

If we
fail to anticipate consumer trends and preferences, our
performance could suffer.

Because our success depends on our ability to keep up with
consumer trends, we take steps to address the risk that we will
fail to anticipate consumer preferences. These include, for
example, maintaining extensive contacts with vendors, with other
retailers, as appropriate, and with the National Retail
Federation, comparison shopping and monitoring fashion trends.
Our buying departments and individual buyers monitor consumer
trends and preferences in their respective product categories
and areas. We focus on the demographics associated with the
customer bases of our divisions and we monitor such demographics
in locating new and remodeled stores. Nonetheless, we still face
the risk that we will fail to effectively anticipate consumer
trends and preferences, which failure could adversely affect our
operating results.

We
experience risks associated with our substantial size and
scale.

We operate eight store chains in several countries. Some aspects
of the businesses and operations of the chains are conducted
with relative autonomy. The large size of our operations, our
multiple businesses and the autonomy afforded to the chains
increase the risk that systems and practices will not be
implemented uniformly throughout our Company and that
information will not be appropriately shared across different
chains and countries.

Unseasonable
weather in the markets in which our stores operate could
adversely affect our operating results.

Customers willingness to shop and their demand for the
merchandise in our stores are affected by adverse and
unseasonable weather. Frequent or unusually heavy snow, ice or
rain storms, natural disasters, severe cold or heat or

We
operate in highly competitive markets, and we may not be able to
compete effectively.

The retail business is highly competitive. We compete for
customers, associates, locations, merchandise, services and
other important aspects of our business with many other local,
regional and national retailers. We also face competition from
alternative retail distribution channels such as catalogues,
media and internet sites. Changes in the merchandising, pricing
and promotional activities of those competitors and in the
retail industry generally may adversely affect our performance.

If we do
not attract and retain quality sales, distribution center and
other associates in large numbers as well as experienced buying
and management personnel, our performance could be adversely
affected.

Our performance is dependent on recruiting, developing, training
and retaining quality sales, distribution center and other
associates in large numbers as well as experienced buying and
management personnel. Many of our associates are in entry level
or part-time positions with historically high rates of turnover.
The nature of the workforce in the retail industry subjects us
to the risk of immigration law violations. Our ability to meet
our labor needs while controlling costs is subject to external
factors such as unemployment levels, prevailing wage rates,
minimum wage legislation and changing demographics. In the event
of increasing wage rates, if we do not increase our wages
competitively, our customer service could suffer because of a
declining quality of our workforce, or our earnings could
decrease if we increase our wage rates. In addition, certain
associates in our distribution centers are members of unions and
therefore subject us to the risk of labor actions. Further, our
off-price model limits the market for experienced buying and
management personnel and requires us to do significant internal
training and development. Changes that adversely impact our
ability to attract and retain quality associates and management
personnel could adversely affect our performance.

If we
engage in mergers or acquisitions of new businesses, or divest
any of our current businesses, our business will be subject to
additional risks.

We have grown our business through mergers and acquisitions.
Integrating new stores and concepts can be a difficult task. We
may consider attractive opportunities to acquire new businesses
or to divest any of our current business segments. Acquisition
or divestiture activities may divert attention of our executive
management team away from the existing businesses. We may do a
less than optimal job of due diligence or evaluation of target
companies. Divestiture also involves risks, such as the risk of
future exposure on lease obligations. Failure to execute on
mergers or divestitures in a satisfactory manner could have an
adverse effect on our future business prospects or our financial
performance in the future.

If we are
unable to operate information systems and implement new
technologies effectively, our business could be disrupted or our
sales or profitability could be reduced.

The efficient operation of our business is dependent on our
information systems, including our ability to operate them
effectively and to successfully implement new technologies,
systems, controls and adequate disaster recovery systems. In
addition, we must protect the confidentiality of our and our
customers data. The failure of TJXs information
systems to perform as designed or our failure to implement and
operate them effectively could disrupt our business or subject
us to liability and thereby harm our profitability. See also the
risk factor above entitled We have expended and expect
to expend significant time and money as a result of the Computer
Intrusion we suffered, and as a result of the Computer
Intrusion, we could incur material losses, and our reputation
and business could be materially harmed.

We depend
upon strong cash flows from our operations to support new
capital expansion, operations, debt repayment and stock
repurchase program.

Our business is dependent upon our operations generating strong
cash flows to support our capital expansion requirements, our
general operating activities and our stock repurchase programs
and to fund debt repayment and the availability of financing
sources. Our inability to continue to generate sufficient cash
flows to support these activities or the lack of availability of
financing in adequate amounts and on appropriate terms could
adversely affect our financial performance or our earnings per
share growth.

15

Consumer
spending is adversely affected by general economic and other
factors, which are beyond our control, and could adversely
affect our sales and operating results.

Interest rates; recession; inflation; deflation; consumer credit
availability; consumer debt levels; energy costs; tax rates and
policy; unemployment trends; threats or possibilities of war,
terrorism or other global or national unrest; actual or
threatened epidemics; political or financial instability; and
general economic and other factors have significant effects on
consumer confidence and spending, which in turn affect sales at
TJX and other retailers. These factors are beyond our control
and could adversely affect our sales and performance.

We are
subject to import risks.

Many of the products sold in our stores are sourced by our
vendors and to a limited extent by us in many foreign countries.
Imported merchandise is subject to various risks, including
potential disruptions in supply, changes in duties, tariffs,
quotas and voluntary export restrictions on imported
merchandise, strikes and other events affecting delivery; and
economic, political or other problems in countries from or
through which merchandise is imported. Political or financial
instability, trade restrictions, tariffs, currency exchange
rates, transport capacity and costs and other factors relating
to international trade and imported merchandise are beyond our
control and could affect the availability and the price of our
inventory.

Our
expanding international operations expose us to risks inherent
in foreign operations.

We have a significant presence in Canada, the United Kingdom and
Ireland, and have plans to expand into Germany in fiscal 2008.
We may also seek to expand into other international markets in
the future. Our foreign operations encounter risks similar to
those faced by our U.S. operations, as well as risks inherent in
foreign operations, such as understanding the retail climate and
trends, local customs and competitive conditions in foreign
markets, complying with foreign laws, rules and regulations, and
foreign currency fluctuations, which could have an adverse
impact on our profitability.

Changes
in laws and regulations and accounting rules and principles
could negatively affect our business operations and financial
performance.

Various aspects of our operations are subject to federal, state
or local laws, rules and regulations, any of which may change
from time to time. Generally accepted accounting principles may
change from time to time, as well. Regulatory developments and
changes in accounting rules and principles could adversely
affect our business operations and financial performance.

We
maintain internal controls over financial reporting, but they
cannot provide absolute assurance that there will not be
material errors in our financial reporting.

We maintain a system of internal controls over financial
reporting, but there are limitations inherent in internal
control systems. If we are unable to maintain adequate and
effective internal control over financial reporting, our
financial performance could be adversely affected. A control
system, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of
the control system are met. In addition, the design of a control
system must reflect the fact that there are resource constraints
and the benefit of controls must be appropriate relative to
their costs.

ITEM 1B. Unresolved
Staff Comments

None

ITEM 2. Properties

We lease virtually all of our store locations, generally for
10 years with an option to extend the lease for one or more
5-year
periods. We have the right to terminate some of these leases
before the expiration date under specified circumstances and for
specified payments.

16

The following is a summary of our primary distribution centers
and administrative office locations as of January 27, 2007.
Square footage information for the distribution centers
represents total ground cover of the facility.
Square footage information for office space represents total
space occupied:

Litigation. Since mid-January, 2007, a number
of putative class actions have been filed against TJX in state
and federal courts in Alabama, California, Massachusetts and
Puerto Rico, and in provincial Canadian courts in Alberta,
British Columbia, Manitoba, Ontario, Quebec and Saskatchewan,
putatively on behalf of customers, including all customers in
the United States, Puerto Rico and Canada, whose transaction
data were allegedly compromised by the Computer Intrusion. An
action has also been filed against TJX in federal court in
Massachusetts putatively on behalf of all financial institutions
who issued credit and debit cards purportedly used at TJX stores
during the period of the security breach. The actions assert
claims, generally, for negligence and related common-law and/or
statutory causes of action stemming from the Computer Intrusion,
and seek various forms of relief including damages, related
injunctive or equitable remedies, multiple or punitive damages,
and attorneys fees. Various wholly-owned subsidiaries of
TJX, as well as Fifth Third Bank and/or Fifth Third Bancorp, are
also named as defendants in several of the actions. These cases
are all in their initial phases, and no discovery has commenced.
On February 15, 2007, the plaintiffs in one of the cases
filed a motion with the Judicial Panel on Multidistrict
Litigation, MDL Docket No. 1838, to have all of the actions
pending in federal court in the United States and Puerto Rico
transferred to the District of Massachusetts for pretrial
consolidation and coordination, and TJX has supported that
motion. TJX intends to defend these actions vigorously. The
actions referenced above are as follows:

On January 19, 2007, a putative class action was filed
against TJX in the United States District Court for the District
of Alabama, Wood, et ano. v. TJX, Inc., et al.,
07-cv-00147. The plaintiffs purport to represent a class of
all TJX customers who made credit card transactions at
TJXs stores during the period that the security of
[d]efendants computer systems were compromised and the privacy
or security of whose credit card, check card, or debit card
account, transaction or non-public information was
compromised. The complaint asserts claims for negligence
per se, negligence, bailment and breach of contract, and also
names Fifth Third Bancorp as a defendant. Plaintiffs seek
compensatory damages, credit monitoring, injunctive relief,
attorneys fees and costs. On March 6, 2007, the court
granted an unopposed motion to stay the action pending
disposition of the motion before the Judicial Panel for
Multidistrict Litigation to transfer the action and similar
federal court actions to the District of Massachusetts for
pretrial consolidation and coordination.

On January 19, 2007, a putative class action was filed
against TJX in the Supreme Court of British Columbia, Canada,
Ryley v. TJX Companies, Inc., et al., Court File
No. 07-0278.
The plaintiff purports to represent a putative class of
all individuals resident in British Columbia, or
throughout Canada and elsewhere, who have communicated
confidential debit and credit information to the [d]efendants in
2003, or between May 1, 2006 and December 31,
2006. The complaint also names Winners Apparel
Inc. and HomeSense Inc. as defendants, and
asserts claims for negligence, breach of confidence and
violation of privacy. The plaintiff seeks general and pecuniary
damages, punitive damages, interest, attorneys fees and
costs.

On January 19, 2007, a putative class action was filed
against TJX in the Quebec Superior Court, Canada, Howick v.
TJX Companies, Inc., et al., Court File
No. 06-000382-073.
The plaintiff purports to represent a putative class of
[a]ll physical persons in Quebec and Canada and all legal
persons in Quebec and Canada who, during the twelve
(12) month period preceding this Motion for Authorization
to Institute a Class Action, had not more than fifty
(50) employees under their direction or control, who have
communicated personal or confidential information to the
[r]espondents and have suffered damage as a result of the loss
or theft of this personal or confidential information. The
complaint also names Winners Merchants International
LP and HomeSense Inc. as defendants. The
plaintiff seeks general and special damages, punitive damages,
attorneys fees, interest and costs.

On January 20, 2007, a putative class action was filed
against TJX in The Court of Queens Bench, Alberta, Canada,
Churchman, et ano. v. The TJX Companies, Inc., et al.,
Court File
No. 0701-00964.
The plaintiffs purport to represent a putative class of
individuals who communicated to the [d]efendants
confidential information being their debit card numbers and
credit card numbers, expiry dates, and all of the information
accessible to someone in possession of those debit cards or
credit cards. The complaint also names Winners
Apparel Inc., Winners Merchants International
LP and HomeSense Inc. as defendants and
asserts claims for negligence, breach of confidence and
violation of privacy. Plaintiffs seek general and special
damages, punitive damages, attorneys fees, interest and
costs.

On January 22, 2007, a putative class action was filed
against TJX in The Court of Queens Bench, Saskatchewan,
Canada, Copithorn v. TJX Companies, Inc., et al., Court
File No. 100. The plaintiff purports to represent a
putative class of

18

all individuals resident in Saskatchewan or throughout
Canada and elsewhere, who have communicated confidential debit
and credit information to the Defendants in 2003 or between
May 1, 2006 and December 31, 2006. The complaint
also names Winners Apparel Inc. and HomeSense
Inc. as defendants and asserts claims for negligence,
breach of confidence and violation of privacy. The plaintiff
seeks general and pecuniary damages, punitive damages, interest,
attorneys fees and costs.

On January 26, 2007, a putative class action was filed
against TJX in the Superior Court of Los Angeles County,
California, Lemley v. TJX, Inc., et al., BC365384. The
action was subsequently removed to the United States District
Court for the District of California (docket
no. 07-cv-01017),
where plaintiff filed an amended complaint. On March 15,
2007, the Court issued an order remanding the action back to the
Superior Court, and TJX is seeking further review of that order.
The plaintiff in the action purports to represent a class of
all TJX customers who made credit card transactions at
TJXs stores during the period that the security of
[d]efendants computer systems were compromised and the
privacy or security of whose credit card, check card, or debit
card account, transaction or non-public information was
compromised. The complaint, as amended, asserts claims for
negligence per se, negligence, bailment, breach of contract, and
violation of California Civil Code § 17200, California
Civil Code § 1798.80-84, and California Civil Code §
1798.53. The action also includes Bobs Stores Corp. and
Fifth Third Bancorp as defendants. The plaintiff seeks
compensatory, statutory and punitive damages, credit monitoring,
injunctive and equitable relief including disgorgement of
profits and appointment of a receiver, attorneys fees,
costs and interest.

On January 26, 2007, a putative class action was filed
against TJX in the Superior Court of Justice, Ontario, Canada,
Wong, et ano. v. The TJX Companies, Inc., et al., Court
File
No. CV-07-0272-00.
The plaintiffs purport to represent a putative class of
[a]ll persons (including their estates, executors, or
personal representatives), corporations, and other entities, who
have communicated personal, debit card, or credit card
information to the [d]efendants in 2003, or between May 1,
2006 and December 31, 2006; which information was later
stolen or released to unauthorized third parties. The
complaint also names Winners Apparel Inc.,
Winners Merchants International LP and
HomeSense Inc. as defendants and asserts claims for
negligence, breach of confidence and violation of privacy.
Plaintiffs seek compensatory damages, punitive damages,
interest, attorneys fees and costs.

On January 29, 2007, a putative class action was filed
against TJX in the United States District Court for the District
of Massachusetts, Mace v. TJX Companies, Inc.,
07-cv-10162. The plaintiff purports to represent a class of
all persons or entities in the United States who have had
personal or financial data stolen from TJXs computer
network, and who were damaged thereby. The complaint
asserts a claim for negligence and seeks compensatory damages,
credit monitoring, injunctive relief, attorneys fees,
costs and interest.

On January 31, 2007, a putative class action was filed
against TJX in the United States District Court for the District
of Puerto Rico, Miranda, et al. v. TJX, Inc., et ano.,
07-cv-01075. The plaintiffs purport to represent a class of
all TJX customers who made credit card transactions at
TJXs stores during the period that the security of
[d]efendants computer systems were compromised and the privacy
or security of whose credit card, check card, or debit card
account, transaction or non-public information was
compromised. The complaint asserts claims for negligence
per se, negligence, bailment and breach of contract, and also
names Fifth Third Bancorp as a defendant. Plaintiffs seek
compensatory damages, credit monitoring, injunctive relief,
attorneys fees and costs.

On January 31, 2007, a putative class action was filed
against TJX in the United States District Court for the District
of Massachusetts, AmeriFirst Bank v. TJX Companies, Inc., et
al., 07-cv-10169. The plaintiff purports to represent a
class of all financial institutions that issued credit
cards and/or debit cards to its customers that were used at any
of TJXs outlets and/or stores during the period of the
security breach. The complaint asserts claims for
negligence, breach of contract and negligence per se, and also
names Fifth Third Bancorp and Fifth Third Bank as defendants.
The plaintiff seeks compensatory damages including for recovery
of the cost of issuance of replacement cards and liability for
unauthorized transactions, as well as injunctive relief,
attorneys fees and costs.

On January 31, 2007, a putative class action was filed
against TJX in The Court of Queens Bench, Manitoba,
Canada, Churchman, et ano. v. The TJX Companies, Inc., et
al., Court File
No. 07-01-50449.
The plaintiffs purport to represent a putative class of
[a]ll persons (including their estates, executors, or
personal representatives), corporations, and other entities, who
have communicated personal, debit card, or credit card
information to the [d]efendants in 2003, or between May 1,
2006 and December 31, 2006; which information was later
stolen or released to unauthorized third parties. The
complaint also names Winners Apparel Inc.,
Winners Merchants International LP and
HomeSense Inc. as defendants and asserts claims for
negligence, breach of confidence and violation of privacy.
Plaintiffs seek general and special damages, punitive damages,
attorneys fees, interest and costs.

19

On February 2, 2007, a putative class action was filed
against TJX in the United States District Court for the District
of Massachusetts, Buckley, et al. v. TJX Companies, Inc.,
07-cv-10209. The plaintiffs purport to represent a class of
all individuals in the United States whose personal or
financial data was stolen, or cannot definitively be determined
not to have been stolen, from TJX as a result of the conduct
described herein. The complaint asserts claims for
negligence, breach of contract and bailment, and TJX has
received a related demand letter purporting to assert a further
claim on behalf of individuals in the United States and Canada
under Massachusetts General Laws, c. 93A. Plaintiffs seek
compensatory damages, creation of a fund for future damages,
credit monitoring, injunctive relief, attorneys fees and
costs.

On February 5, 2007, a putative class action was filed
against TJX in the United States District Court for the District
of Massachusetts, Gaydos v. TJX Companies, Inc., et ano.,
07-cv-10217. The plaintiff purports to represent a class of
all persons or entities in the United States who have had
personal or financial data stolen from TJXs computer
network, and who were damaged thereby. The complaint
asserts a claim for negligence, and also names Fifth Third
Bancorp as a defendant. The plaintiff seeks compensatory
damages, credit monitoring, injunctive relief, attorneys
fees, costs and interest.

On February 5, 2007, a putative class action was filed
against TJX in the Superior Court of Middlesex County,
Massachusetts, McMorris v. The TJX Companies, Inc., et
ano.,
07-0460. The
plaintiff purports to represent a class of [r]esidents of
Massachusetts who made purchases and paid by credit or debit
card or check or who made a return at one or more Marshalls,
T.J. Maxx, HomeGoods, or A.J. Wright stores in the United States
in 2003 or from May to December 2006. The complaint
asserts claims for negligence and violation of Massachusetts
General Laws c. 214, § 1B, and TJX has received a related
demand letter asserting a further claim under Massachusetts
General Laws, c. 93A. The plaintiff seeks compensatory damages,
credit monitoring, injunctive relief, attorneys fees,
costs and interest.

On February 15, 2007, a putative class action was filed
against TJX in the United States District Court for the District
of Massachusetts, Cohen, et al. v. TJX Companies, Inc., et
ano., 07-cv-10280. The plaintiffs purport to represent a
class of all persons or entities in the United States who
have had personal or financial data stolen from TJXs
computer network, and who were damaged thereby. The
complaint asserts a claim for negligence, and also names Fifth
Third Bancorp as a defendant. Plaintiffs seek compensatory
damages, credit monitoring, injunctive relief, attorneys
fees, costs and interest.

On March 8, 2007, two putative class actions were filed
against TJX in the Superior Court of Los Angeles County,
California, Salinas, et ano. v. The TJX Companies, Inc., et
al., BC367531, and Pickering v. The TJX Companies, Inc.,
et al., BC367530. The plaintiffs in each case purport to
represent a class of [a]ll California residents whose
debit cards, check cards, credit cards (including American
Express, Discover, MasterCard or Visa accounts), transaction or
other personal or non-public information, including information
at any TJX retail store such as T.J. Maxx and Marshalls, was
maintained, provided to others and/or subject to unauthorized
release by Defendants from January 2003 through the date of
[j]udgment. The complaints in each case assert claims for
negligence and for violation of California Civil Code §
1781.81, California Civil Code § 1798.82, and California
Civil Code § 17200, and also name T.J. Maxx of CA, LLC and
Fifth Third Bancorp as defendants. The plaintiffs in each case
seek compensatory damages, injunctive and equitable relief
including implementation of security measures, notification to
customers and credit monitoring, and attorneys fees, costs
and interest.

On March 16, 2007, a putative class action was filed
against TJX in the United States District Court for the Southern
District of California, Tennent v. The TJX Companies, Inc.,
et ano., 07-cv-00484. The plaintiff purports to represent a
class of all TJX customers who entered into credit card
transactions at TJXs stores and whose personal and/or
financial information was stored in [d]efendants databases
during the period that the security of said databases was
compromised. The complaint asserts claims for negligence
per se, negligence, and bailment, and also names Fifth Third
Bancorp as a defendant. The plaintiff seeks compensatory
damages, credit monitoring, injunctive relief, attorneys fees
and costs.

On March 23, 2007, a putative class action was filed in the
United States District Court for the District of Massachusetts,
Rivas, et ano. v. TJX Companies, Inc., 07-cv-10565. The
plaintiffs purport to represent a class of all individuals
in the United States whose personal or financial data was
stolen, or cannot definitively be determined not to have been
stolen, from TJX as a result of the conduct alleged in the
complaint. The complaint asserts claims for negligence, breach
of contract, bailment and for violation of Massachusetts General
Laws c. 93A, § 2. The plaintiffs seek

In addition, the Arkansas Carpenters Pension Fund (the
Pension Fund), the purported beneficial holder of
4,500 shares of TJX common stock, has commenced an action
in the Delaware Chancery Court under Section 220 of the
Delaware General Corporation Law demanding to inspect certain of
TJXs books and records relating to the Computer Intrusion
and TJXs response to the Computer Intrusion. As relief,
the Pension Fund seeks the right to inspect records dating back
to 2003, as well as its attorneys fees and costs.

Government Investigations. A number of
government agencies are conducting investigations as to whether
TJX as a result of the Computer Intrusion may have violated laws
regarding consumer protection and related matters. TJX has been
advised that the Attorney General of the Commonwealth of
Massachusetts is leading an investigation into the Computer
Intrusion on behalf of a multi-state group of state Attorneys
General (the Multi-State Group), which as initially
comprised had approximately 30 participating states. In March
2007, the Company received a civil investigative demand
(CID) from the Massachusetts Attorney Generals
office seeking documents concerning the Computer Intrusion as
part of that offices review of allegations that the
Company may have violated state law regarding consumer
protection and related matters. The Company also received nearly
identical demands in March 2007 from eight other state Attorneys
General that are participating in the Multi-State Group. These
demands include a CID from the Attorney General of the State of
Arkansas, a CID from the Attorney General of the State of
Illinois, a subpoena from the Attorney General of the State of
New Jersey, a subpoena from the State of Ohio, a CID from the
State of Oregon Department of Justice, a subpoena from the
Attorney General of the Commonwealth of Pennsylvania, a Request
for Consumer Protection Information (Request) from
the Attorney General of the State of Tennessee (which had issued
an earlier Request in January 2007), and a subpoena from the
Attorney General of the State of Vermont. TJX has been advised
that the Attorneys General of two other states participating in
the Multi-State Group may also issue their own demands, which if
issued are expected to be substantively identical to the other
demands TJX has received.

In addition to these demands, the Company also has received a
number of other inquiries, requests and demands from state
Attorneys General for information relating to the Computer
Intrusion (most shortly after TJX announced the Computer
Intrusion publicly and before the Multi-State Group commenced
its investigation), including a request by the Attorney General
of the State of Connecticut that the Company voluntarily provide
written answers to various questions relating to the Computer
Intrusion, a CID from the Secretary of the State of Rhode Island
and verbal requests for information from various other state
Attorneys General.

TJX also has been advised that the Federal Trade Commission
(FTC) is investigating the Computer Intrusion to
determine whether the Company may have violated federal law
regarding consumer protection and related matters.

TJX also has been advised that the Office of the Privacy
Commissioner of Canada and the Office of the Information and
Privacy Commissioner of Alberta have initiated formal
investigations of TJX as a result of the Computer Intrusion and
that the Office of the Information and Privacy Commissioner of
British Columbia has initiated an investigation relating to the
collection of personal information in connection with
merchandise returns at TJXs stores. The Office of the
Privacy Commissioner of Quebec also has inquired about the
Computer Intrusion, but has not advised the Company of any
formal investigation.

TJX has been cooperating in each of these investigations.

ITEM 4. Submission
of Matters to a Vote of Security Holders

There was no matter submitted to a vote of TJXs security
holders during the fourth quarter of fiscal 2007.

ITEM 4A. Executive
Officers of the Registrant

Office and Employment

Name

Age

During Last Five Years

Arnold Barron

59

Senior Executive Vice President,
Group President, TJX since March 2004. Executive Vice President,
Chief Operating Officer of The Marmaxx Group from 2000 to 2004.
Senior Vice President, Group Executive of TJX from 1996 to
2000. Senior Vice President, General Merchandise Manager of the
T.J. Maxx Division from 1993 to 1996; Senior Vice President,
Director of Stores, 1984 to 1993; various store operation
positions with TJX, 1979 to 1984.

21

Office and Employment

Name

Age

During Last Five Years

Bernard Cammarata

67

Chairman of the Board since 1999.
Acting Chief Executive Officer from September 2005 to January
2007 and Chief Executive Officer of TJX from 1989 to 2000.
President from 1989 to 1999. Chairman of the T.J. Maxx Division
from 1986 to 1995 and of The Marmaxx Group from 1995 to 2000.
Executive Vice President of TJX from 1986 to 1989; President,
Chief Executive Officer and a Director of TJXs former TJX
subsidiary from 1987 to 1989 and President of the T.J. Maxx
Division from 1976 to 1986.

Donald G. Campbell

55

Vice Chairman since September
2006, Senior Executive Vice President, Chief Administrative and
Business Development Officer from March 2004 to September 2006.
Executive Vice President - Finance from 1996 to 2004 and Chief
Financial Officer of TJX from 1989 to 2004. Senior Vice
President - Finance, from 1989 to 1996. Senior Financial
Executive of TJX, 1988 to 1989; Senior Vice President - Finance
and Administration, Zayre Stores Division, 1987 to 1988; Vice
President and Corporate Controller of TJX, 1985 to 1987; various
financial positions with TJX, 1973 to 1985.

Chief Executive Officer of TJX
since January 2007, Director since September 2006 and President
since October 2005. Consultant to TJX from January 2005 to
October 2005. Senior Executive Vice President, TJX from March
2004 to January 2005. President of The Marmaxx Group from 2001
to January 2005. Executive Vice President of TJX from 2001 to
2004. Executive Vice President, Merchandising, The Marmaxx Group
from 2000 to 2001 and Senior Vice President, Merchandising from
1999 to 2000. Executive Vice President, Merchandising,
Chadwicks of Boston, Ltd. from 1996 to 1999; Senior Vice
President, Merchandising from 1991 to 1996 and Vice President,
Merchandising from 1989 to 1991. Vice President, Division
Merchandise Manager, Hit or Miss from 1987 to 1989.

All officers hold office until the next annual meeting of the
Board in June 2007 and until their successors are elected, or
appointed, and qualified.

22

PART II

ITEM 5.

Market for
the Registrants Common Equity, Related Security Holder
Matters and Issuer Purchases of Equity Securities

Price
Range of Common Stock

Our common stock is listed on the New York Stock Exchange
(Symbol: TJX). The quarterly high and low sale prices for the
equity for fiscal 2007 and fiscal 2006 are as follows:

Fiscal 2007

Fiscal 2006

Quarter

High

Low

High

Low

First

$

26.28

$

23.81

$

25.96

$

22.51

Second

$

25.11

$

22.16

$

25.10

$

22.30

Third

$

29.74

$

24.00

$

23.60

$

19.95

Fourth

$

30.24

$

26.67

$

25.48

$

21.17

The approximate number of common shareholders at
January 27, 2007 was 52,000.

We declared four quarterly dividends of $0.07 per share for
fiscal 2007 and $0.06 per share for fiscal 2006. While our
dividend policy is subject to periodic review by our Board of
Directors, we currently intend to continue to pay comparable
dividends in the future, as well as to continue to repurchase
our common stock.

Information
on Share Repurchases

The number of shares of common stock repurchased by TJX during
the fourth quarter of fiscal 2007 and the average price paid per
share is as follows:

Maximum Number

Total Number of

(or Approximate

Shares Purchased as

Dollar Value) of

Part of a Publicly

Shares that May Yet

Number of Shares

Average Price Paid

Announced

be Purchased Under

Repurchased

Per
Share(1)

Plan or
Program(2)

the Plans or Programs

October 29, 2006 through
November 25, 2006

2,367,200

$

28.80

2,367,200

$

474,766,473

November 26, 2006 through
December 30, 2006

1,372,210

$

28.11

1,372,210

$

436,197,058

December 31, 2006 through
January 27, 2007

-

-

-

$

436,197,058

Total:

3,739,410

3,739,410

(1)

Average price paid per share
includes commissions and is rounded to the nearest two decimal
places.

(2)

In October 2005, our Board of
Directors approved a repurchase program to repurchase up to
$1 billion of TJX common stock from time to time. As of
January 27, 2007, we had repurchased 22 million shares
at a cost of $564 million under this program. In January
2007, our Board of Directors approved a new repurchase program
to repurchase up to $1 billion of TJX common stock from
time to time, in addition to the $436 million remaining at
fiscal 2007 year end under the October 2005 plan.

23

ITEM 6. Selected
Financial Data

Selected Financial Data

Amounts in Thousands

Fiscal Year Ended
January(1)

Except Per Share Amounts

2007

2006

2005

2004

2003

(53 Weeks)

Income statement and per share
data:

Net sales

$

17,404,637

$

15,955,943

$

14,860,746

$

13,300,194

$

11,963,095

Income from continuing operations

$

776,756

$

689,834

$

610,217

$

608,906

$

538,896

Weighted average common shares for
diluted earnings per share calculation

Fiscal years ended January 28,
2006 and prior have been adjusted to reclassify the operating
results of the A.J. Wright store closings to discontinued
operations (See Note C to the consolidated financial
statements). Fiscal years ended January 29, 2005 and prior
have been adjusted to reflect the effect of adopting Statement
of Financial Accounting Standards No. 123(R). See
Note A to the consolidated financial statements at
Stock-Based Compensation.

(2)

Includes long-term debt, exclusive
of current installments and obligation under capital lease, less
portion due within one year.

(3)

Total capitalization includes
shareholders equity, short-term debt, long-term debt and
capital lease obligation, including current maturities.

(4)

A.J. Wright stores in operation and
selling square footage for fiscal years 2006 and prior include
store counts and square footage for the stores that are part of
our discontinued operations.

24

ITEM 7.

Managements
Discussion and Analysis of Financial Condition and Results of
Operations

The following discussion contains forward-looking information
and should be read in conjunction with the consolidated
financial statements and notes thereto included elsewhere in
this report. Our actual results could differ materially from the
results contemplated by these forward-looking statements due to
various factors, including those discussed in Item 1A of
this report under the section entitled Risk Factors.

The discussion that follows relates to our fiscal years ended
January 27, 2007 (fiscal 2007), January 28, 2006
(fiscal 2006) and January 29, 2005 (fiscal 2005).

In November 2006, we decided to close 34 A.J. Wright stores as
part of a repositioning of the chain. The following discussion
focuses on our results from continuing operations, which
excludes the results of these 34 A.J. Wright stores. The cost to
close these stores was recorded as a discontinued operation in
the fourth quarter of fiscal 2007 and the operating income or
loss from these stores is also presented as a discontinued
operation for all periods presented. The closings resulted in an
after tax charge of $38 million, or $0.08 per share, in the
fourth quarter of fiscal 2007 and is discussed in more detail in
Note C to the consolidated financial statements and below
within the A.J. Wright discussion under Segment
Information.

During the fourth quarter of fiscal 2007, we discovered that we
had suffered an unauthorized intrusion into the portion of our
computer systems that processes and stores information related
to customer transactions. We do not know who took this action,
whether there were one or more intruders involved, or whether
there was one continuing intrusion or multiple, separate
intrusions (we refer to the intrusion or intrusions collectively
as the Computer Intrusion). We have been engaged in
an ongoing investigation of the Computer Intrusion and computer
security and incident response experts have been engaged to
assist in the investigation. We believe customer data was stolen
in the Computer Intrusion in 2005 and 2006. In the fourth
quarter of fiscal 2007, we recorded a pre-tax charge of
approximately $5 million, or $0.01 per share, for
costs incurred through the fourth quarter in connection with the
Computer Intrusion, which includes costs incurred to investigate
and contain the Computer Intrusion, enhance computer security
and systems, and communicate with customers, as well as
technical, legal, and other fees. Beyond this charge, we do not
yet have enough information to reasonably estimate losses we may
incur arising from the Computer Intrusion. Such losses could be
material to our results of operations and financial condition.
For more information, see
Item 1-Business
under the caption Computer Intrusion, Note B to
the consolidated financial statements and the discussion below
under the caption Potential liabilities in connection with
Computer Intrusion.

Consolidated same store sales increased 4% in fiscal 2007 over
the prior year driven by growth in unit sales and transactions
across the majority of our businesses, as well as particularly
strong same store sales growth at our international divisions.
In addition, approximately one percentage point of this increase
came from the favorable effect of currency exchange rates.



We increased our number of stores by 4% in fiscal 2007, ending
the fiscal year with 2,466 stores in operation. Our selling
square footage grew by 4% in fiscal 2007.



Income from continuing operations for fiscal 2007 was
$776.8 million, or $1.63 per diluted share, compared to
$689.8 million, or $1.41 per diluted share, last year.
Results for prior years were impacted by certain charges and

25

one-time items that affect the comparability of reported
results. The chart below shows the effect of these items on
income from continuing operations and diluted earnings per share
(EPS) for fiscal 2006 and fiscal 2005.

Fiscal 2007

Fiscal 2006

Fiscal 2005

Dollars In Millions Except Per Share Amounts

$s

EPS

$s

EPS

$s

EPS

Income from continuing operations,
as reported

$

777

$

1.63

$

690

$

1.41

$

610

$

1.21

Charges and one-time items:

Correction to deferred tax
liability

-

-

(22

)

(0.04

)

-

-

Repatriation income tax benefit

-

-

(47

)

(0.10

)

-

-

Third quarter events
*

-

-

12

0.02

-

-

Cumulative lease accounting charge

-

-

-

-

19

0.04

Income from continuing operations,
as adjusted

$

777

$

1.63

$

633

$

1.29

$

629

$

1.25

*

The third quarter events for fiscal 2006 include executive
resignation agreements of $0.01 per share,
e-commerce
exit costs and operating losses of $0.01 per share, and
hurricane related costs including the estimated impact of lost
sales of $0.01 per share, partially offset by a gain from a
VISA/MasterCard antitrust litigation settlement of ($0.01) per
share.

We believe this presentation reflects our results on a more
comparable basis, and is useful in understanding the underlying
trends in our business.



During the first quarter of fiscal 2007, as part of cost
containment initiatives, we eliminated approximately 250
positions (including 100 open positions) and twelve of our
senior executives agreed to 10% base salary reductions. These
actions resulted in an estimated annualized savings of
approximately $18 million. We incurred a first quarter
pre-tax charge in connection with the workforce reduction of
$7 million.



Our pre-tax margin (the ratio of pre-tax income to net sales)
improved from 6.3% in fiscal 2006 to 7.2% in fiscal 2007
primarily due to improved merchandise margins and expense
leverage from our cost containment initiatives. These
improvements were partially offset by a planned increase in
marketing expenses and the costs incurred in connection with the
Computer Intrusion.



We continued to generate strong cash flows from operations which
allowed us to fund our stock repurchase program as well as our
capital investment needs. During fiscal 2007, we repurchased
22 million of our shares at a cost of $557 million,
which favorably affected our earnings per share. In January
2007, our Board of Directors approved a new stock repurchase
program that authorizes the repurchase of up to $1 billion
of TJX common stock from time to time, which is in addition to
the $436 million which remained in the existing plan at
fiscal 2007 year end. As a result of the discovery and
investigation of the Computer Intrusion in December 2006, we
temporarily suspended our share repurchase activity.



Average per store inventories, including inventory on hand at
our distribution centers, were up 7% at the end of fiscal 2007
as compared to the prior year end when average per store
inventories were down 11%. The increased inventories at fiscal
2007 year end were primarily due to a higher in-stock
position on spring transitional goods and an increase in the
average unit retail price (average ticket). The
decline at the prior year end was largely due to lower levels of
inventory in our distribution centers.

The following is a summary of the operating results of TJX at
the consolidated level. This discussion is followed by an
overview of operating results by segment. All references to
earnings per share are diluted earnings per share from
continuing operations unless otherwise indicated. All prior
periods have been adjusted to reclassify the operating results
of the A.J. Wright store closings to discontinued operations.
See Note C to our consolidated financial statements.

The 9% increase in net sales for fiscal 2007 includes a 5%
increase attributable to new stores and a 4% increase in same
store sales. The 7% increase in net sales for fiscal 2006 over
fiscal 2005 reflects 5% from new stores and 2% from same store
sales.

New stores are a major source of sales growth. Our consolidated
store count increased by 4% in fiscal 2007 and 7% in fiscal 2006
over the respective prior year periods, and our selling square
footage increased by 4% in fiscal 2007 and 8%

26

in fiscal 2006, in each case without adjustment for the A.J.
Wright closed stores. Excluding the impact of the A.J. Wright
store closings in fiscal 2007, our consolidated store count and
total selling square footage each increased by 5% in fiscal
2007. We expect to add 83 stores (net of store closings) in the
fiscal year ending January 26, 2008 (fiscal 2008), a 3%
projected increase in our consolidated store base, and we expect
to increase our selling square footage base by 4%.

The 4% increase in same store sales for fiscal 2007 was driven
by growth in unit sales and increased transactions as well as
the strong performance at our international businesses
(Winners same store sales increased 5% and T.K. Maxx same
store sales increased 9%, both in local currency). Net sales for
fiscal 2007 reflect growth in both apparel and home fashions.
Within apparel, jewelry, accessories and footwear (combined), as
well as misses sportswear and dresses performed well. As for
home fashions, giftware and home decorative products performed
well while our soft home categories (bedding,
linens, etc.) were weak. Same store sales also benefited from
the continued expansion of footwear departments in Marshalls.
During fiscal 2007, we added 134 expanded footwear departments,
bringing the total number of stores with the expanded footwear
departments to 280. These stores had same store sales growth
that exceeded the chain average. During fiscal 2008, we intend
to expand footwear departments in approximately 200 additional
Marshalls stores. The expansion of jewelry and accessory
departments at T.J. Maxx was substantially completed during
fiscal 2007, with 686 out of the total 821 stores having
expanded departments as of year end. Going forward, we plan to
add jewelry and accessory expansions to certain new stores and
relocated stores, as well as a limited number of existing
stores. In the United States, where TJX generates approximately
80% of its sales, same store sales increased across almost all
regions, with the Northeast, Southwest and Mid-Atlantic areas
experiencing the strongest growth. Same store sales growth was
favorably impacted by foreign currency exchange rates, which
contributed approximately one percentage point of growth.

Net sales for fiscal 2006 reflected strong demand for jewelry,
accessories and footwear, as well as improved demand for
mens apparel. The positive impact of growth in these
categories was partially offset by same store sales declines in
home fashions and womens sportswear. Marmaxx continued its
program of expanding jewelry and accessories and footwear
departments and ended fiscal 2006 with 594 T.J. Maxx stores with
expanded jewelry and accessories departments and 146 Marshalls
stores with expanded footwear departments. These stores had same
store sales growth which exceeded Marmaxxs chain average.
In the United States, same store sales were strong in warm
weather regions, particularly Florida, the Southwest and
California, while flat to slightly negative in the Midwest and
Northeast. Same store sales growth was favorably impacted by
foreign currency exchange rates, which contributed approximately
one-half of a percentage point of growth.

We define same store sales to be sales of those stores that have
been in operation for all or a portion of two consecutive fiscal
years, or in other words, stores that are starting their third
fiscal year of operation. We classify a store as a new store
until it meets the same store criteria. We determine which
stores are included in the same store sales calculation at the
beginning of a fiscal year and the classification remains
constant throughout that year, unless a store is closed. We
calculate same store sales results by comparing the current and
prior year weekly periods that are most closely aligned.
Relocated stores and stores that are increased in size are
generally classified in the same way as the original store, and
we believe that the impact of these stores on the same store
percentage is immaterial. Consolidated and divisional same store
sales are calculated in U.S. dollars. We also show divisional
same store sales in local currency for our foreign divisions
because this removes the effect of changes in currency exchange
rates, and we believe it is a more appropriate measure of the
divisional operating performance.

The following table sets forth our consolidated operating
results as a percentage of net sales:

Fiscal Year Ended January

2007

2006

2005

Net sales

100.0

%

100.0

%

100.0

%

Cost of sales, including buying
and occupancy costs

75.9

76.6

76.4

Selling, general and
administrative expenses

16.8

16.9

16.7

Interest expense, net

0.1

0.2

0.2

Income from continuing operations
before provision for income taxes

7.2

%

6.3

%

6.7

%

27

Cost of sales, including buying and occupancy
costs: Cost of sales, including buying and
occupancy costs, as a percentage of net sales was 75.9% in
fiscal 2007, 76.6% in fiscal 2006 and 76.4% in fiscal 2005. This
ratio for fiscal 2007, as compared to fiscal 2006, reflects an
improvement in our consolidated merchandise margin
(0.4 percentage points) as well as expense leverage due to
our cost containment initiatives and the impact of strong same
store sales growth. These improvements in the fiscal 2007
expense ratio were partially offset by increases in some
operating costs as a percentage of net sales, primarily
occupancy costs (0.2 percentage points).

Cost of sales, including buying and occupancy costs, as a
percentage of net sales for fiscal 2006 as compared with fiscal
2005 reflects an improvement in our consolidated merchandise
margin of 0.5 percentage points. The improvement in
merchandise margin was largely due to lower markdowns at our
smaller divisions, partially offset by an increase in fuel
related freight costs. In addition, the comparison to the fiscal
2005 expense ratio was favorably impacted by a
$30.7 million non-cash charge ($19.3 million
after-tax) in fiscal 2005 to conform our lease accounting
practices to generally accepted accounting principles. See
Note A to the consolidated financial statements under the
caption Lease Accounting. This charge was included
in cost of sales in fiscal 2005 and increased that years
expense ratio by 0.2 percentage points. These improvements
in the fiscal 2006 expense ratio were more than offset by
increases in operating costs as a percentage of net sales,
primarily occupancy costs, which reflect the de-levering impact
of a 2% same store sales growth as well as higher cost of sales
ratios at divisions other than Marmaxx, which represent a
greater proportion of the consolidated results in fiscal 2006
compared to fiscal 2005.

Selling, general and administrative
expenses: Selling, general and administrative
expenses as a percentage of net sales were 16.8% in fiscal 2007,
16.9% in fiscal 2006 and 16.7% in fiscal 2005. The
0.1 percentage point decrease in fiscal 2007 reflects
expense leverage across most categories, partially offset by a
planned increase in marketing expense (0.1 percentage
point). The increase in fiscal 2006 compared to fiscal 2005
reflects an increase in store payroll costs as a percentage of
net sales, reflecting the de-levering impact of the low
single-digit same store sales increase. The increase in this
ratio for fiscal 2006 compared to fiscal 2005 was also
negatively affected by the net impact of third quarter events
including the costs of the executive resignation agreements,
e-commerce
exit and hurricane related costs, offset in part by a
VISA/Mastercard antitrust litigation settlement.

Interest expense, net: Interest expense, net
of interest income, was $15.6 million for fiscal 2007,
$29.6 million in fiscal 2006 and $25.8 million in
fiscal 2005. Interest income was $23.6 million in fiscal
2007, $9.4 million in fiscal 2006 and $7.7 million in
fiscal 2005. The decrease in net interest expense in fiscal 2007
was due to the increase in interest income. The increase in
interest income in fiscal 2007 was driven by higher cash
balances and higher rates of return on short term investments.
The increase in net interest expense in fiscal 2006 was due to
higher short-term borrowings and interest rates. The higher
borrowing levels were primarily driven by the timing of
inventory purchases, capital expenditures and repurchase of the
Companys common stock. The additional interest expense
from short-term borrowings was partially offset by reduced
interest costs due to the repayment of $100 million of 7%
unsecured notes in June 2005, as well as an increase in interest
income due to higher interest rates.

Income taxes: Our effective annual income tax
rate was 37.7% in fiscal 2007, 31.6% in fiscal 2006 and 38.3% in
fiscal 2005. The increase in the fiscal 2007 effective income
tax rate reflected the absence of one-time tax benefits recorded
in the fourth quarter of fiscal 2006 (described in more detail
below) which favorably impacted the fiscal 2006 effective income
tax rate by 6.8 percentage points. The fiscal 2007 effective
income tax rate benefited through July 20, 2006 from the
tax treatment of foreign currency gains and losses on certain
intercompany loans between Winners and TJX. This tax treatment
reduced the fiscal 2007 effective income tax rate by
0.2 percentage points. Effective July 20, 2006, we
re-designated one of these intercompany loans and the related
hedge as a net investment in our foreign operations, and gains
and losses on these items after July 20, 2006 are recorded
in other comprehensive income, net of tax effects. In addition,
the fiscal 2007 effective income tax rate was favorably impacted
by increased income at our foreign operations (a portion of
which are taxed at a lower rate than our domestic operations) as
well as settlement of a state tax assessment for less than the
related reserves. Combined, these two items reduced the
effective income tax rate by 0.6 percentage points as
compared to fiscal 2006.

The tax provision for fiscal 2006 includes a fourth quarter
benefit of $47 million due to the repatriation of earnings
from our Canadian subsidiary. In addition, during the fourth
quarter of fiscal 2006, we corrected our accounting for the tax
impact of foreign currency gains on certain intercompany loans.
We previously established a deferred tax liability on these
gains (which are not taxable). The impact of correcting for the
tax treatment of these gains resulted in a tax benefit of
$22 million, or $0.04 per share in fiscal 2006. The
cumulative impact of this adjustment through the end of the
third quarter of fiscal 2006 was $18.2 million, all of
which was recorded in the fourth quarter of

28

fiscal 2006. Of the $18.2 million, $10.1 million
related to fiscal 2005. These two items collectively reduced the
fiscal 2006 effective income tax rate by 6.8 percentage
points. See Note I to the consolidated financial statements.

Income from continuing operations: Income from
continuing operations was $776.8 million in fiscal 2007,
$689.8 million in fiscal 2006 and $610.2 million in
fiscal 2005. Income from continuing operations per share was
$1.63 in fiscal 2007, $1.41 in fiscal 2006 and $1.21 in fiscal
2005. Unlike many companies in the retail industry, TJX did not
have a 53rd week in fiscal 2007, but will have a 53rd week in
fiscal 2009.

Income from continuing operations for fiscal 2007 was adversely
impacted by an after-tax charge relating to the Computer
Intrusion of approximately $3 million, which reduced fourth
quarter earnings per share by $0.01 per share. Income from
continuing operations for fiscal 2006 was favorably impacted by
a tax benefit of $47 million, or $0.10 per share, due to
the repatriation of foreign earnings as well as a tax benefit of
$22 million, or $0.04 per share, relating to the correction
of a previously established deferred tax liability. Favorable
changes in currency exchange rates added approximately $0.03 to
our earnings per share in fiscal 2007 and approximately $0.01
per share in fiscal 2006.

Income from continuing operations for fiscal 2006 was adversely
impacted by approximately $12 million, or $0.02 per
share, due to the third quarter events. These third quarter
events included the after-tax cost of executive resignation
agreements, primarily with respect to our former CEO
($5 million),
e-commerce
exit costs and third quarter operating losses ($6 million),
and uninsured losses due to third quarter hurricanes, including
the estimated impact of lost sales ($6 million), all of
which were partially offset by a gain from a VISA/MasterCard
antitrust litigation settlement ($5 million). Operating
losses of the
e-commerce
operation in the first six months of fiscal 2006 were largely
offset by fiscal 2005 start up costs and a fourth quarter
operating loss in fiscal 2005.

Income from continuing operations for fiscal 2005 was reduced by
$19.3 million, or $0.04 per share, as a result of the
after-tax effect of the $30.7 million cumulative pre-tax,
non-cash charge to conform our lease accounting practices to
generally accepted accounting principles. See Note A to the
consolidated financial statements under the caption Lease
Accounting. Lastly, favorable changes in currency exchange
rates during fiscal 2005 added approximately $0.02 to our
earnings per share.

The change in earnings per share from fiscal 2006 to fiscal 2007
was favorably impacted by our share repurchase program. During
fiscal 2007 we repurchased 22.0 million shares of our stock
at a cost of $557 million, which was less than planned as
we temporarily suspended our buyback activity in December 2006
as a result of the discovery and investigation of the Computer
Intrusion. In fiscal 2006 we repurchased 25.9 million
shares at a cost of $600 million. In January 2007, our
Board of Directors approved a new stock repurchase program that
authorizes the repurchase of up to $1 billion of TJX common
stock from time to time, which is in addition to the
$436 million remaining in the existing plan. We plan to
continue our share repurchase program in fiscal 2008 with
planned purchases of approximately $900 million.

Fourth Quarter Results: Fourth quarter income
from continuing operations was $243 million, or $0.51 per
share, in fiscal 2007, $287 million, or $0.59 per share, in
fiscal 2006 and $165 million, or $0.33 per share, in fiscal
2005. Results for the fourth quarter of fiscal 2006 and fiscal
2005 were impacted by certain charges and one-time items that
affect the comparability of reported results. The chart below
shows the effect of these items on fourth quarter income from
continuing operations and earnings per share:

Fourth Quarter

Fourth Quarter

Fiscal 2007

Fiscal 2006

Fourth Quarter Fiscal 2005

Dollars In Millions Except Per Share Amounts

$s

EPS

$s

EPS

$s

EPS

Income from continuing operations,
as reported

$

243

$

0.51

$

287

$

0.59

$

165

$

0.33

Charges and one-time items:

Correction to deferred tax
liability

-

-

(22

)

(0.04

)

-

-

Repatriation income tax benefit

-

-

(47

)

(0.10

)

-

-

Cumulative lease accounting charge

-

-

-

-

19

0.04

Income from continuing operations,
as adjusted

$

243

$

0.51

$

218

$

0.45

$

184

$

0.37

We believe this presentation reflects our results on a more
comparable basis, and is useful in understanding the underlying
trends in our business.

29

Excluding these charges and one-time items from fiscal 2006, the
fiscal 2007 fourth quarter income from continuing operations of
$243 million increased 11% and earnings per share of $0.51
increased 13%. Pre-tax profit margin was 7.5% in both fiscal
2007 and fiscal 2006. Pre-tax margin improved on the strength of
strong same-store sales at Winners, T.K. Maxx and HomeGoods,
resulting in expense leverage across most categories. This
improvement in the pre-tax margin was offset by costs related to
the Computer Intrusion (0.1 percentage point), a planned
increase in advertising expense (0.2 percentage points) and
an increase in occupancy costs at T.K. Maxx (0.1 percentage
point) as well as the year over year decline in A.J.
Wrights and Bobs Stores segment profit margins.

Discontinued operations and net income: Our
results from continuing operations exclude the results of
operations and the cost of closing 34 A.J. Wright stores. See
Segment Information  A.J. Wright below
and Note C to the consolidated financial statements for
more information. Net income, which includes the impact of
discontinued operations, was $738 million, or $1.55 per
share for fiscal 2007, $690 million, or $1.41 per share for
fiscal 2006 and $610 million, or $1.21 per share in fiscal
2005.

Segment information: The following is a
discussion of the operating results of our business segments. We
consider each of our operating divisions to be a segment. We
evaluate the performance of our segments based on segment
profit or loss, which we define as pre-tax income before
general corporate expense and interest. Segment profit or
loss as we define the term may not be comparable to
similarly titled measures used by other entities. In addition,
this measure of performance should not be considered an
alternative to net income or cash flows from operating
activities as an indicator of our performance or as a measure of
liquidity. More detailed information about our segments,
including a reconciliation of segment profit or loss
to income from continuing operations before provision for
income taxes can be found in Note O to the
consolidated financial statements. Presented below is selected
financial information related to our business segments (U.S.
dollars in millions):

Segment profit or loss for fiscal 2005 includes each
segments share of the cumulative pre-tax charge relating
to lease accounting. See Note A to the consolidated
financial statements under the caption Lease
Accounting.

Marmaxx:

Fiscal Year Ended January

Dollars In Millions

2007

2006

2005

Net sales

$

11,531.8

$

10,956.8

$

10,489.5

Segment profit

1,079.3

985.4

982.1

Segment profit as a % of net sales

9.4

%

9.0

%

9.4

%

Percent increase in same store
sales

2

%

2

%

4

%

Stores in operation at end of
period

1,569

1,514

1,468

Selling square footage at end of
period (in thousands)

38,468

36,987

35,544

Marmaxx posted a 2% same store sales increase in fiscal 2007,
consistent with the prior year. Both apparel and home fashions
reported same store sales growth in fiscal 2007 with apparel
performing slightly better than home fashions. Same store sales
of jewelry and accessories and footwear, combined, as well as
misses sportswear and dresses were above the chain average. Same
store sales also benefited from the continued expansion of
footwear departments in Marshalls. During fiscal 2007, we added
134 expanded footwear departments, bringing the total number of
expanded footwear stores to 280. During fiscal 2008, we intend
to expand footwear departments in approximately 200 additional
Marshalls stores. The expansion of jewelry and accessory
departments at T.J. Maxx was substantially completed during
fiscal 2007, with 686 out of the total 821 stores having
expanded departments as of year end. Going forward, we will add
jewelry and accessory expansions to certain new stores and
relocated stores, as well as a limited number of existing
stores. Geographically in fiscal 2007, regions that performed
above the chain average were the Southwest, Northeast and
Mid-Atlantic.

Segment profit as a percentage of net sales (segment
margin) increased to 9.4% in fiscal 2007 from 9.0% in
fiscal 2006. The increase in the fiscal 2007 segment margin was
largely driven by 0.2 percentage point improvement in
merchandise margin, primarily due to lower markdowns, and
expense leverage across most categories due to our cost
containment initiatives. Additionally, fiscal 2007 includes the
favorable impact on current year casualty insurance and employee
medical costs due to favorable claims experience. These
improvements in segment margin were partially offset by an
increase in occupancy costs (0.2 percentage points) and a
planned increased in marketing costs (0.1 percentage
point). As of January 27, 2007, average inventories per
store were up 8% compared to a 10% decline at the prior year
end. The increase at fiscal 2007 year end was primarily due
to our in-stock position on spring transitional goods and

30

an increase in average ticket. The decline at the prior year end
was largely due to lower levels of inventory in our distribution
centers.

Segment margin decreased to 9.0% in fiscal 2006 from 9.4% in
fiscal 2005. The decline in the fiscal 2006 segment margin was
largely driven by the de-levering impact of a 2% same store
sales increase, which impacted operating expense ratios,
primarily occupancy costs (which increased 0.3 percentage
points) and distribution center costs (which increased
0.1 percentage point). In addition, certain of the third
quarter events described above
(e-commerce
and hurricane related losses offset in part by the gain from the
VISA/MasterCard settlement) reduced segment margin in fiscal
2006 by 0.1 percentage point. The comparison to the fiscal
2005 margin was favorably impacted by the inclusion in fiscal
2005s segment profit of a $16.8 million charge for
the cumulative impact of the lease accounting adjustment, which
reduced fiscal 2005 segment profit margin by 0.2 percentage
points. Merchandise margin for fiscal 2006 was essentially flat
compared to fiscal 2005 despite fuel related increases in
freight costs.

We added a net of 55 new stores (T.J. Maxx or Marshalls) in
fiscal 2007, and increased total selling square footage of the
division by 4%. We expect to open 50 new stores (net of
closings) in fiscal 2008, increasing the Marmaxx store base by
3% and increasing its selling square footage by 3%.

Winners
and HomeSense:

Fiscal Year Ended January

U.S. Dollars In Millions

2007

2006

2005

Net sales

$

1,740.8

$

1,457.7

$

1,285.4

Segment profit

181.9

120.3

99.7

Segment profit as a % of net sales

10.4

%

8.3

%

7.8

%

Percent increase (decrease) in
same store sales

U.S. currency

11

%

4

%

10

%

Local currency

5

%

(3

)%

4

%

Stores in operation at end of
period

Winners

184

174

168

HomeSense

68

58

40

Selling square footage at end of
period (in thousands)

Winners

4,214

4,012

3,811

HomeSense

1,280

1,100

747

Net sales for Winners and HomeSense, our Canadian businesses,
for fiscal 2007 increased by 19% over fiscal 2006, with
approximately one-third of this growth due to currency exchange
rates. Same store sales (in local currency) increased by 5% in
fiscal 2007 and decreased by 3% in fiscal 2006. Same store sales
for fiscal 2007 were favorably impacted by improved merchandise
flow and increased brand penetration. In terms of product
categories, same store sales were driven by strong growth in
jewelry, footwear and accessories as well as home fashions.
HomeSense performed well, favorably impacting this
divisions results. Same store sales and operating results
for HomeSense were significantly improved over the prior year.

Segment profit margin for fiscal 2007 was up 2.1 percentage
points to 10.4% compared to 8.3% for fiscal 2006. This
improvement in segment margin was primarily due to a
1.4 percentage point increase in merchandise margins
(improved markon and lower markdowns) combined with improved
expense ratios (leverage from the 5% same store sales increase
as well as cost containment initiatives). These increases were
partially offset by a planned increase in advertising costs
which increased 0.2 percentage points as a percentage of
net sales.

Segment profit margin for fiscal 2006 improved by
0.5 percentage points compared to fiscal 2005. This
improvement was primarily due to a 2.9 percentage point increase
in merchandise margins, which were driven by improved inventory
management resulting in reduced clearance sales and lower
markdowns. The increase in merchandise margin was partially
offset by the de-levering impact of the 3% decline in same store
sales. Expense ratios increased across most categories, with a
1.4 percentage point increase in occupancy and distribution
costs being the most significant. Incremental costs associated
with three store closings in fiscal 2006 also adversely affected
segment profit. The comparison of segment profit and segment
margin for fiscal 2006 to fiscal 2005 is also favorably impacted
by the inclusion in the fiscal 2005 segment profit of a
$3.5 million charge for this divisions share of the
cumulative impact of the lease accounting adjustment.

We added a net of 10 Winners stores and 10 HomeSense stores in
fiscal 2007, and expanded selling square footage in Canada by
7%. We expect to add a net of 4 Winners and 3 HomeSense stores
in fiscal 2008, increasing our total

31

Canadian store base by 3%, and increasing selling square footage
by 3%. The store counts include the Winners and HomeSense
portions of this divisions superstores, which either
combine a Winners store with a HomeSense store or operates them
side-by-side.
As of January 27, 2007 we operated 29 of these superstores.

T.K.
Maxx:

Fiscal Year Ended January

U.S. Dollars In Millions

2007

2006

2005

Net sales

$

1,864.5

$

1,517.1

$

1,304.4

Segment profit

109.3

69.2

64.0

Segment profit as a % of net sales

5.9

%

4.6

%

4.9

%

Percent increase (decrease) in
same store sales

U.S. currency

13

%

(1

)%

14

%

Local currency

9

%

1

%

3

%

Stores in operation at end of
period

210

197

170

Selling square footage at end of
period (in thousands)

4,636

4,216

3,491

Net sales in fiscal 2007 for T.K. Maxx, operating in the United
Kingdom and Ireland, increased by 23% over fiscal 2006, with
approximately one-fifth of this growth due to currency exchange
rates. T.K. Maxx had a strong same store sales increase of 9%
(in local currency) in fiscal 2007 with growth in both home
fashions and most apparel categories. Apparel categories that
performed well included dresses, accessories and footwear, while
misses sportswear was below the chain average.

Segment profit margin improved to 5.9% of sales for fiscal 2007
compared to 4.6% for fiscal 2006. The 1.3 percentage point
improvement was due to merchandise margin, which was up
0.9 percentage points (primarily due to lower markdowns),
as well as expense leverage from the 9% same store sales
increase. These improvements were partially offset by an
increase in occupancy expense due to higher costs for rent,
utilities and property taxes and costs associated with store
relocations.

Segment profit margin for fiscal 2006 declined
0.3 percentage points to 4.6% of sales. T.K. Maxx had an
improved merchandise margin in fiscal 2006, primarily due to
lower markdowns. In addition, the comparison of segment profit
and segment margin of fiscal 2006 to fiscal 2005 was favorably
impacted by the inclusion in the fiscal 2005 segment profit of
this divisions share of the cumulative impact of the lease
accounting adjustment of $6.5 million. These improvements
however, were more than offset by an increase in occupancy
expense due to higher cost for rent, utilities and property
taxes as well as the de-levering impact of a 1% same store sales
increase. Distribution and administrative costs as a percentage
of net sales were essentially flat compared to fiscal 2005,
despite the low same store sales increase.

We added a net of 13 T.K. Maxx stores in fiscal 2007 and
increased the divisions selling square footage by 10%. We
plan to open a net of 10 T.K. Maxx stores in fiscal 2008, and
expand selling square footage by 7%. Also, we expect to expand
into Germany with 5 store openings planned for fiscal 2008.

HomeGoods:

Fiscal Year Ended January

Dollars In Millions

2007

2006

2005

Net sales

$

1,365.1

$

1,186.9

$

1,012.9

Segment profit

60.9

28.4

18.1

Segment profit as a % of net sales

4.5

%

2.4

%

1.8

%

Percent increase in same store
sales

4

%

1

%

1

%

Stores in operation at end of
period

270

251

216

Selling square footage at end of
period (in thousands)

5,181

4,859

4,159

HomeGoods same store sales grew 4% in fiscal 2007, due to
strong growth in giftware and home decorative products. Segment
profit increased to $60.9 million from $28.4 million,
and segment profit margin almost doubled to 4.5% of sales. The
increase in segment profit margin resulted primarily from the
leverage of expenses across most categories, most notably in
distribution center and occupancy expenses. Additionally,
merchandise margin increased 0.4 percentage points primarily due
to higher markon.

HomeGoods same store sales grew 1% in fiscal 2006.
Customer transactions and unit sales increased at HomeGoods
during fiscal 2006 compared to fiscal 2005, but these increases
were partially offset by a decline in the

32

average ticket resulting from planned changes to the merchandise
mix. Segment profit increased to $28.4 million from
$18.1 million, and segment profit margin increased to 2.4%
of sales from 1.8% of sales in the prior year. The increase in
segment profit margin resulted primarily from an increase in
merchandise margin (lower markdowns partially offset by the
impact of higher freight costs), as well as the impact on prior
year results of the cumulative lease accounting charge of
$2.2 million.

We opened a net of 19 HomeGoods stores in fiscal 2007, an 8%
increase, and increased selling square footage of the division
by 7%. In fiscal 2008, we plan to add a net of 12 HomeGoods
stores and increase selling square footage by 5%.

A.J.
Wright:

Fiscal Year Ended January

Dollars In Millions

2007

2006

2005

Net sales

$

601.8

$

549.0

$

477.9

Segment profit (loss)

(10.3

)

(3.2

)

(18.8

)

Segment profit (loss) as a % of
net sales

(1.7

)%

(0.6

)%

(3.9

)%

Percent increase in same store
sales

3

%

3

%

4

%

Stores in operation at end of
period

129

152

130

Selling square footage at end of
period (in thousands)

2,577

3,054

2,606

A.J. Wrights same store sales increased 3% for fiscal
2007, consistent with the prior year. A.J. Wrights segment
loss for fiscal 2007 increased to $10.3 million compared to
$3.2 million for the prior year. This decline is primarily
the result of a decrease in merchandise margin
(1.2 percentage points) due to markdowns on below-plan
sales. During the fourth quarter of fiscal 2007, as part of a
plan to reposition this business, we identified 34
underperforming A.J. Wright stores for closing, virtually all of
which were closed by fiscal 2007 year end. The cost to
close these stores and their historical operating results are
presented as discontinued operations as described below. By
closing these marginally profitable stores, we reduced the
number of advertising markets in which A.J. Wright operates
enabling better marketing leverage as well as enabling greater
efficiencies in store operations and logistics. The store
closings also allow management to focus their attention and
resources on the remaining, better performing stores.

A.J. Wrights same store sales increased 3% for fiscal
2006, compared to a 4% increase in same store sales for fiscal
2005. A.J. Wrights segment loss for fiscal 2006 was
narrowed to $3.2 million from $18.8 million in fiscal
2005. This improvement was driven by improved merchandise
margin, primarily the result of lower markdowns in fiscal 2006.
The comparison to fiscal 2005 is also impacted by the inclusion
of a $1.7 million charge in fiscal 2005 for its share of
the lease accounting adjustment. In fiscal 2006, effective
expense control also led to a reduction in expenses as a
percentage of sales across most expense categories, primarily in
advertising and store payroll and benefits. We reduced the
number of our new store openings for A.J. Wright in fiscal 2006
and fiscal 2007 as compared to fiscal 2005 as we believed that
the pace of store openings in fiscal 2005 may have been too
aggressive for this division, placing a strain on operations.

The table above presents A.J. Wrights operating results
from continuing operations. Stores in operation and selling
square footage for fiscal 2006 and fiscal 2005 include store
counts and square footage for the stores that are part of our
discontinued operations. As described earlier, during the fourth
quarter of fiscal 2007, we identified 34 underperforming A.J.
Wright stores to be closed as part of our plan to reposition
this business. In connection with this action, we incurred an
after-tax charge of $38 million in the fiscal 2007 fourth
quarter. This charge represents costs related to asset
impairment, remaining lease liability (net of expected subtenant
income), and severance and other costs. We have classified these
exit costs, along with operating income or loss related to these
stores, as discontinued operations in our financial statements
for all periods presented. The operating income or loss for each
year represents the operating results from store operations,
reduced by an allocation of direct and incremental distribution
and administrative costs relating to the closed stores. No
interest expense was allocated to the discontinued operations.
The following table presents the net sales and segment profit
(loss) of the closed stores in operation for the last three
fiscal years which have been reclassified to discontinued
operations:

33

Discontinued
operations:

Fiscal Year Ended January

Dollars In Millions

2007

2006

2005

Net sales

$

111.8

$

102.0

$

52.7

Segment profit (loss)

(1.0

)

1.0

(0.8

)

Closed stores in operation during
period

34

33

22

We currently plan to open 5 A. J. Wright stores in fiscal 2008.
We continue to believe that A.J. Wright can be a growth vehicle
for TJX, with its very sizable target demographic.

Bobs
Stores:

Fiscal Year Ended January

Dollars In Millions

2007

2006

2005

Net sales

$

300.6

$

288.5

$

290.6

Segment profit (loss)

(17.4

)

(28.0

)

(18.5

)

Segment profit (loss) as a % of
net sales

(5.8

)%

(9.7

)%

(6.4

)%

Percent increase in same store
sales

2

%

N/A

N/A

Stores in operation at end of
period

36

35

32

Selling square footage at end of
period (in thousands)

1,306

1,276

1,166

Bobs Stores net sales increased 4% for fiscal 2007,
compared to a slight decrease last year. Same store sales
increased 2% with our expanded womens casual sportswear
departments performing well. Bobs Stores reduced its
segment losses for the fiscal year due to the sales growth
combined with significant improvement in merchandise margins.
Merchandise margin increases were driven by improved markon, the
result of better buying, which more than offset increases in
promotional markdowns as we significantly increased the level of
promotions in this business.

Net sales for fiscal 2006 were less than the prior year,
primarily due to a reduction in the number of promotional
advertising circulars. Although merchandise margin improved in
fiscal 2006 (due to lower promotional markdowns) the sales
decline and incremental operating costs resulted in an increased
segment loss for fiscal 2006 as compared to fiscal 2005. Segment
loss in fiscal 2006 also includes severance costs of
$0.8 million in connection with a reduction in the work
force at Bobs Stores.

For fiscal 2008, we do not plan to open any new stores for this
division as we continue to evaluate this business and assess its
potential for future growth.

General
Corporate Expense:

Fiscal Year Ended January

Dollars In Millions

2007

2006

2005

General corporate expense

$

141.4

$

134.1

$

111.1

General corporate expense for segment reporting purposes are
those costs not specifically related to the operations of our
business segments. This item includes the costs of the corporate
office, including the compensation and benefits (including stock
based compensation) for senior corporate management; payroll and
operating costs of the corporate departments of accounting and
budgeting, internal audit, compliance, treasury, investor
relations, tax, risk management, legal, human resources and
systems; and the occupancy and office maintenance costs
associated with the corporate staff. In addition, general
corporate expense includes the cost of benefits for existing
retirees and non-operating costs and other gains and losses not
attributable to individual divisions. General corporate expense
is included in selling, general and administrative expenses in
the consolidated statements of income.

Fiscal 2007 included pre-tax charges of approximately
$5 million related to the Computer Intrusion, and
approximately $5 million related to the corporate
divisions cost of the workforce reduction and other
termination benefits, while fiscal 2006 included costs of
$9 million associated with executive resignation agreements
and $6 million of costs to exit the e- commerce business.
The increase in other general corporate expenses in fiscal 2007
over fiscal 2006 also reflected increases in corporate payroll,
corporate marketing and consulting costs, charitable
contributions, and European expansion costs.

The increase in general corporate expense in fiscal 2006 over
fiscal 2005 is primarily due to the costs associated with
executive resignation agreements ($9 million) and of
exiting the
e-commerce
business of ($6 million). Both of these

34

items occurred in our third quarter ended October 29, 2005.
In addition, general corporate expense for fiscal 2006 includes
a charge ($4 million) in connection with an idle leased
facility.

Liquidity
and Capital Resources

Operating activities:

Net cash provided by operating activities was
$1,195.0 million in fiscal 2007, $1,158.0 million in
fiscal 2006 and $1,076.8 million in fiscal 2005. The cash
generated from operating activities in each of these fiscal
years was largely due to operating earnings.

Operating cash flows for fiscal 2007 increased by $
37.0 million driven by an increase in net income (adjusted
for depreciation) of $86.4 million. The change in
inventory, net of accounts payable, from prior year-end levels
was a significant component of operating cash flows. In fiscal
2007, the change in merchandise inventory, net of the related
change in accounts payable, resulted in a use of cash of
$151.2 million compared to a source of cash of
$26.2 million in fiscal 2006. Fiscal 2007 operating cash
flows were also reduced by higher income tax payments. These
reductions in fiscal 2007 operating cash flows as compared to
fiscal 2006 were offset by the favorable cash flow impact of
changes in deferred income taxes, accounts receivable and
prepaid expenses.

Operating cash flows for fiscal 2006 increased by $
81.2 million compared to operating cash flows for fiscal
2005. Net income (adjusted for depreciation) for fiscal 2006
increased by approximately $116 million. The change in
merchandise inventory, net of the related change in accounts
payable, resulted in a source of cash of $26.2 million in
fiscal 2006 compared to a use of cash of $85.3 million in
fiscal 2005. These increases in fiscal 2006 operating cash flow
as compared to fiscal 2005 were offset by the unfavorable cash
impact of changes in prepaid expenses and deferred taxes.

The variance in operating cash flows attributable to the change
in the net inventory position over the last three fiscal years
is largely explained by our average per store inventory levels
at each year end period. Average per store inventories at
January 27, 2007, including inventory on hand at our
distribution centers, increased 7% compared to a decrease of 11%
at January 28, 2006. This compares to inventories per store
at January 29, 2005 that were up 1% compared to the prior
year.

Discontinued operations reserve: We have a
reserve for future obligations of discontinued operations that
relates primarily to real estate leases associated with 34 of
our A.J. Wright stores (see Note C to the consolidated
financial statements) as well as leases of former TJX
businesses. The balance in the reserve and the activity for the
last three fiscal years is presented below:

Fiscal Year Ended

January 27,

January 28,

January 29,

Amounts in Thousands

2007

2006

2005

Balance at beginning of year

$

14,981

$

12,365

$

17,518

Additions to the reserve charged
to net income:

A.J. Wright store closings

61,968

-

-

All other

1,555

8,509

2,254

Charges against the reserve:

Lease related obligations

(1,696

)

(6,111

)

(7,066

)

Fixed asset write-offs

(18,732

)

-

-

All other

(399

)

218

(341

)

Balance at end of year

$

57,677

$

14,981

$

12,365

The exit costs related to 34 of our A.J. Wright stores resulted
in an addition to the reserve of $62 million in fiscal
2007. All other additions to the reserve are the result of
periodic adjustments to our estimated lease obligations of our
former businesses and are offset by income from creditor
recoveries of a similar amount. The lease related charges
against the reserve during each fiscal year relate primarily to
our former businesses. The fixed asset write-offs and other
charges against the reserve for fiscal 2007 relate primarily to
the 34 A.J. Wright closed stores, virtually all of which were
closed at the end of fiscal 2007.

35

Approximately $43 million of the fiscal 2007 reserve
balance relates to the A.J. Wright store closings, primarily our
estimation of lease costs, net of estimated subtenant income.
The remainder of the reserve reflects our estimation of the cost
of claims, updated quarterly, that have been, or we believe are
likely to be, made against TJX for liability as an original
lessee or guarantor of the leases of former businesses, after
mitigation of the number and cost of lease obligations. At
January 27, 2007, substantially all the leases of former
businesses that were rejected in bankruptcy and for which the
landlords asserted liability against TJX had been resolved. The
actual net cost of A.J. Wright lease obligations may differ from
our original estimate. Although TJXs actual costs with
respect to the lease obligations of former businesses may exceed
amounts estimated in our reserve, and TJX may incur costs for
leases from these former businesses that were not terminated or
had not expired, TJX does not expect to incur any material costs
related to these discontinued operations in excess of the
amounts estimated. We estimate that the majority of this reserve
will be paid in the next three to five years. The actual timing
of cash outflows will vary depending on how the remaining lease
obligations are actually settled.

We may also be contingently liable on up to 15 leases of
BJs Wholesale Club, a former TJX business, for which
BJs Wholesale Club is primarily liable. Our reserve for
discontinued operations does not reflect these leases, because
we believe that the likelihood of any future liability to TJX
with respect to these leases is remote due to the current
financial condition of BJs Wholesale Club.

Potential
liabilities in connection with Computer Intrusion

We believe that customer information was stolen in the Computer
Intrusion in 2005 and 2006 and that such information most likely
primarily relates to transactions at our stores (other than
Bobs Stores) during the periods 2003 through June 2004 and
mid-May 2006 through mid-December 2006. See
Item 1-Business
under the caption Computer Intrusion.

During the fourth quarter of fiscal 2007, we recorded a pre-tax
charge of approximately $5 million, or $0.01 per
share, for costs incurred through the fourth quarter in
connection with the Computer Intrusion, which includes costs
incurred to investigate and contain the Computer Intrusion,
strengthen computer security and systems, and communicate with
customers, and for technical, legal and other fees. In addition,
various litigation and claims have been (or may be) asserted
against us
and/or our
acquiring banks on behalf of customers (including various
putative class actions seeking in the aggregate to represent all
customers in the United States, Puerto Rico and Canada whose
transaction information was allegedly compromised by the
Computer Intrusion), banks and payment card companies seeking
damages allegedly arising out of the Computer Intrusion and
other related relief (including a putative class action seeking
to represent all financial institutions that issued payment
cards to our customers used at our stores during the period of
the Computer Intrusion) and shareholders. We intend to defend
such litigation and claims vigorously, although the outcome of
such litigation and claims cannot be predicted. In addition,
various governmental agencies are investigating the Computer
Intrusion, and we may be subject to fines or other obligations
as a result of these investigations. Certain banks have sought,
and other banks and payment card companies may seek, either
directly against us or through claims against our acquiring
banks as to which we may have an indemnity obligation, payment
of or reimbursement for fraudulent card charges and operating
expenses that they believe they have incurred by reason of the
Computer Intrusion, and payment card companies and associations
may seek to impose fines by reason of the Computer Intrusion. We
do not have sufficient information to reasonably estimate losses
that may result from such litigation, claims and investigations.
As such, no liability has been recorded as of January 27,
2007. We will continue to evaluate information as it becomes
known and will record an estimate for losses at the time or
times when it is both probable that a loss has been incurred and
the amount of the loss is reasonably estimable. Such losses
could be material to our results of operations and financial
condition. Regardless of the outcome, claims, litigation and
proceedings of this type are expensive and could require us to
devote substantial resources and time to defending them.

Off-balance sheet liabilities: We have
contingent obligations on leases, for which we were a lessee or
guarantor, which were assigned to third parties without TJX
being released by the landlords. Over many years, we have
assigned numerous leases that we originally leased or guaranteed
to a significant number of third parties. With the exception of
leases of our former businesses discussed above, we have rarely
had a claim with respect to assigned leases, and accordingly, we
do not expect that such leases will have a material adverse
effect on our financial condition, results of operations or cash
flows. We do not generally have sufficient information about
these leases to estimate our potential contingent obligations
under them, which could be triggered in the event that one or
more of the current tenants does not fulfill their obligations
related to one or more of these leases.

36

We also have contingent obligations in connection with some
assigned or sublet properties that we are able to estimate. We
estimate the undiscounted obligations, not reflected in our
reserves, of leases of closed stores of continuing operations,
BJs Wholesale Club leases discussed above, and properties
of our discontinued operations that we have sublet, if the
subtenants did not fulfill their obligations, is approximately
$105 million as of January 27, 2007. We believe that
most or all of these contingent obligations will not revert to
TJX and, to the extent they do, will be resolved for
substantially less due to mitigating factors.

We are a party to various agreements under which we may be
obligated to indemnify the other party with respect to breach of
warranty or losses related to such matters as title to assets
sold, specified environmental matters or certain income taxes.
These obligations are typically limited in time and amount.
There are no amounts reflected in our balance sheets with
respect to these contingent obligations.

Investing activities:

Our cash flows for investing activities include capital
expenditures for the last two years as set forth in the table
below:

Fiscal Year Ended

January 27,

January 28,

Dollars in Millions

2007

2006

New stores

$

123.0

$

171.9

Store renovations and improvements

190.2

267.1

Office and distribution centers

64.8

56.9

Capital expenditures

$

378.0

$

495.9

We expect that capital expenditures will approximate
$500 million for fiscal 2008, which we expect to pay
through internally generated funds. This includes
$108 million for new stores, $267 million for store
renovations, expansions and improvements and $125 million
for our office and distribution centers. The planned increase in
capital expenditures is attributable to increased spending on
renovations and improvements to existing stores, particularly
T.J. Maxx, Marshalls and T.K. Maxx, as well as an increase in
capital spending for systems enhancements and improvements to
the distribution centers.

Financing activities:

Cash flows from financing activities resulted in net cash
outflows of $418.0 million in fiscal 2007,
$503.7 million in fiscal 2006 and $584.6 million in
fiscal 2005. The majority of this outflow relates to our share
repurchase program.

We spent $557.2 million in fiscal 2007, $603.7 million
in fiscal 2006 and $594.6 million in fiscal 2005 under our
stock repurchase programs. We repurchased 22.0 million
shares in fiscal 2007, 25.9 million shares in fiscal 2006
and 25.1 million shares in fiscal 2005. All shares
repurchased were retired. Through January 27, 2007, under
our current $1 billion multi-year stock repurchase program,
we had spent $564 million on the repurchase of
22.3 million shares of TJX common stock. As a result of the
discovery and investigation of the Computer Intrusion in
December 2006, we temporarily suspended our share repurchase
activity. In January 2007, our Board of Directors approved a new
stock repurchase program that authorizes the repurchase of up to
$1 billion of TJX common stock from time to time, which is
in addition to the $436 million remaining in the existing
plan at fiscal 2007 year end.

In January 2006, Winners entered into a C$235 million
(US$204.4) term credit facility, guaranteed by TJX. This credit
facility was originally due in January 2009 and has been
extended to January 2010. Interest is payable at rates equal to,
or less than the Canadian prime rate. Winners entered into an
interest rate swap agreement which effectively established a
fixed interest rate of approximately 4.5% on this debt. The
proceeds were used to fund the repatriation of Winners earnings
to TJX as well as other general corporate purposes of this
division. Financing activities also included scheduled principal
payments on long-term debt of $100 million in fiscal 2006
and $5 million in fiscal 2005. For fiscal 2007, there were
no scheduled principal payments on long-term debt.

We declared quarterly dividends on our common stock which
totaled $0.28 per share in fiscal 2007, $0.24 per share in
fiscal 2006 and $0.18 per share in fiscal 2005. Cash payments
for dividends on our common stock totaled $122.9 million in
fiscal 2007, $105.3 million in fiscal 2006 and
$83.4 million in fiscal 2005. Financing activities also

37

included proceeds of $260.2 in fiscal 2007, $102.4 million
in fiscal 2006 and $96.9 million in fiscal 2005 from the
exercise of employee stock options.

We traditionally have funded our seasonal merchandise
requirements through cash generated from operations, short-term
bank borrowings and the issuance of short-term commercial paper.
In fiscal 2007, we amended our $500 million, four-year
revolving credit facility and our $500 million, five-year
revolving credit facility (initially entered into in fiscal
2006), to extend the maturity dates of these agreements until
May 2010 and May 2011, respectively. These credit facilities
have no compensating balance requirements and have various
covenants including a requirement of a specified ratio of debt
to earnings. We also have a commercial paper program pursuant to
which we issue commercial paper from time to time. These
agreements serve as back up to our commercial paper program. As
of January 27, 2007, we had no short-term debt outstanding.
The maximum amount of our U.S. short-term borrowings outstanding
was $205 million during fiscal 2007, $567 million
during fiscal 2006, and $5 million during fiscal 2005. The
weighted average interest rate on our U.S. short-term borrowings
was 5.35% in fiscal 2007, 3.69% in fiscal 2006 and 2.04% in
fiscal 2005.

As of January 27, 2007 and January 28, 2006, Winners
had two credit lines, one for C$10 million for operating
expenses and one C$10 million letter of credit facility.
The maximum amount outstanding under our Canadian credit line
for operating expenses was C$3.8 million in fiscal 2007,
C$4.6 million in fiscal 2006, and C$6.8 million in
fiscal 2005, and there were no amounts outstanding on either of
these lines at the end of fiscal 2007 or fiscal 2006. As of
January 27, 2007, T.K. Maxx had credit lines totaling
£20 million. The maximum amount outstanding in fiscal
2007 was £10.5 million and there were no outstanding
borrowings on this credit line at January 27, 2007.

We believe that internally generated funds and our current
credit facilities are more than adequate to meet our operating
needs for at least the next twelve months. See Note D to
the consolidated financial statements for further information
regarding our long-term debt and available financing sources.

Contractual obligations: As of
January 27, 2007, we had payment obligations (including
current installments) under long-term debt arrangements, leases
for property and equipment and purchase obligations that will
require cash outflows as follows (in thousands):

Payments Due by Period

Less Than

1-3

3-5

More Than

Contractual Obligations

Total

1 Year

Years

Years

5 Years

Long-term debt obligations
including estimated interest

$

917,027

$

25,565

$

450,132

$

-

$

441,330

Operating lease commitments

5,118,104

845,622

1,544,742

1,175,575

1,552,165

Capital lease obligations

34,124

3,726

7,452

7,623

15,323

Purchase obligations

2,037,641

1,946,407

72,912

18,322

-

Total obligations

$

8,106,896

$

2,821,320

$

2,075,238

$

1,201,520

$

2,008,818

The long-term debt obligations above include estimated interest
costs and assume that all holders of the zero coupon convertible
subordinated notes exercise their put option in fiscal 2014. If
none of the put options are exercised and the notes are not
redeemed or converted, the notes will mature in fiscal 2022. The
effect of the interest rate swap agreements was estimated based
on their values as of January 27, 2007.

The lease commitments in the above table are for minimum rent
and do not include costs for insurance, real estate taxes and
common area maintenance costs that we are obligated to pay.
These costs were approximately one-third of the total minimum
rent for the fiscal year ended January 27, 2007.

Our purchase obligations primarily consist of purchase orders
for merchandise; purchase orders for capital expenditures,
supplies and other operating needs; commitments under contracts
for maintenance needs and other services; and commitments under
executive employment and other agreements. We excluded long-term
agreements for services and operating needs that can be
cancelled without penalty.

We also have long-term liabilities which include
$120.0 million for employee compensation and benefits, most
of which will come due beyond five years, derivative contracts
of approximately $100.0 million, the majority of which come

38

due in fiscal 2010, and $142.0 million for accrued rent,
the cash flow requirements of which are included in the lease
commitments in the above table.

Critical Accounting Policies

TJX must evaluate and select applicable accounting policies. We
consider our most critical accounting policies, involving
management estimates and judgments, to be those relating to
inventory valuation, retirement obligations, casualty insurance,
accounting for taxes, reserves for discontinued operations and
loss contingencies. We believe that we have selected the most
appropriate assumptions in each of the following areas and that
the results we would have obtained, had alternative assumptions
been selected, would not be materially different from the
results we have reported.

Inventory valuation: We use the retail method
for valuing inventory on a
first-in
first-out basis. Under the retail method, the cost value of
inventory and gross margins are determined by calculating a
cost-to-retail
ratio and applying it to the retail value of inventory. This
method is widely used in the retail industry and involves
management estimates with regard to such things as markdowns and
inventory shrinkage. A significant factor involves the recording
and timing of permanent markdowns. Under the retail method,
permanent markdowns are reflected in the inventory valuation
when the price of an item is changed. We believe the retail
method results in a more conservative inventory valuation than
other accounting methods. In addition, as a normal business
practice, we have a specific policy as to when markdowns are to
be taken, greatly reducing the need for management estimates.
Inventory shortage involves estimating a shrinkage rate for
interim periods, but is based on a full physical inventory at
fiscal year end. Thus, the difference between actual and
estimated amounts may cause fluctuations in quarterly results,
but is not a factor in full year results. Overall, we believe
that the retail method, coupled with our disciplined permanent
markdown policy and a full physical inventory taken at each
fiscal year end, results in an inventory valuation that is
fairly stated. Lastly, many retailers have arrangements with
vendors that provide for rebates and allowances under certain
conditions, which ultimately affect the value of the inventory.
Our off-price businesses have historically not entered into such
arrangements with our vendors. Bobs Stores, the
value-oriented retailer we acquired in December 2003, does have
vendor relationships that provide for recovery of advertising
dollars if certain conditions are met. These arrangements may
have some impact on Bobs Stores inventory valuation
but such amounts are immaterial to our consolidated results.

Retirement obligations: Retirement costs are
accrued over the service life of an employee and represent in
the aggregate obligations that will ultimately be settled far in
the future and are therefore subject to estimates. We are
required to make assumptions regarding variables, such as the
discount rate for valuing pension obligations and the long-term
rate of return assumed to be earned on pension assets, both of
which impact the net periodic pension cost for the period. The
discount rate, which we determine annually based on market
interest rates, and our estimated long-term rate of return,
which can differ considerably from actual returns, are two
factors that can have a considerable impact on the annual cost
of retirement benefits and the funded status of our qualified
pension plan. We have made contributions of $65 million,
which exceeded the minimum required, over the last three years
to largely restore the funded status of our plan.

Casualty insurance: TJXs casualty
insurance program requires TJX to estimate the total claims it
will incur as a component of its annual insurance cost. The
estimated claims are developed, with the assistance of an
actuary, based on historical experience and other factors. These
estimates involve significant estimates and assumptions and
actual results could differ from these estimates. If TJXs
estimate for the claims component of its casualty insurance
expense for fiscal 2007 were to change by 10%, the fiscal 2007
pre-tax cost would increase or decrease by approximately
$5 million. A large portion of these claims are funded with
a non-refundable payment during the policy year, offsetting our
estimated claims accrual. The company has a net accrual of
$31.4 million for the unfunded portion of its casualty
insurance program as of January 27, 2007.

Accounting for taxes: Like many large
corporations, we are regularly under audit by the United States
federal, state, local or foreign tax authorities in the areas of
income taxes and the remittance of sales and use taxes. In
evaluating the potential exposure associated with the various
tax filing positions, we accrue charges for possible exposures.
Based on the annual evaluations of tax positions, we believe we
have appropriately filed our tax returns and accrued for
possible exposures. To the extent we were to prevail in matters
for which accruals have been established or be required to pay
amounts in excess of reserves, our effective income tax rate in
a given financial period might be materially impacted. The
Internal Revenue Service has examined the fiscal years ended
January 2000 through January 2003 and several proposed
adjustments are under appeal. We also have various state and
foreign tax examinations in process.

39

Reserves for discontinued operations: As
discussed in Note L to the consolidated financial
statements and elsewhere in the managements discussion and
analysis, we have reserves established for leases relating to
operations discontinued by TJX where TJX was the original lessee
or a guarantor and which have been assigned to third parties.
These are long-term obligations and the estimated cost to us
involves numerous estimates and assumptions as to whether we
remain obligated with respect to a particular lease, amounts of
subtenant income, how a particular obligation may ultimately be
settled and what mitigating factors, including indemnification,
may exist. We develop these assumptions based on past experience
and by evaluating various probable outcomes and the
circumstances surrounding each situation and location. Actual
results may differ from these estimates but we believe that our
current reserve is a reasonable estimate of the most likely
outcome and that the reserve is adequate to cover the ultimate
cost we will incur.

Loss Contingencies: Certain conditions may
exist as of the date the financial statements are issued, which
may result in a loss to TJX but which will not be resolved until
one or more future events occur or fail to occur. TJXs
management and its legal counsel assess such contingent
liabilities, and such assessment inherently involves an exercise
of judgment. In assessing loss contingencies related to legal
proceedings that are pending against TJX or unasserted claims
that may result in such proceedings, TJXs legal counsel
evaluates the perceived merits of any legal proceedings or
unasserted claims as well as the perceived merits of the amount
of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable
that a material loss has been incurred and the amount of the
liability can be estimated, then the estimated liability would
be accrued in the financial statements. If the assessment
indicates that a potentially material loss contingency is not
probable, but is reasonably possible, or is probable but cannot
be estimated, then TJX will disclose the nature of the
contingent liability, together with an estimate of the range of
the possible loss or a statement that such loss is not estimable.

Recent Accounting Pronouncements

In September 2006, the FASB issued Statement of Financial
Accounting Standards No. 158, Employers
Accounting for Defined Benefit Pension and Other Postretirement
Plans -An amendment of FASB Statements No. 87, 88, 106 and
132 (R) (SFAS No. 158). SFAS No. 158
requires the recognition of the funded status of a benefit plan
in the balance sheet; the recognition in other comprehensive
income of gains or losses and prior service costs or credits
arising during the period but which are not included as
components of periodic benefit cost; the measurement of defined
benefit plan assets and obligations as of the balance sheet date
(the measurement provisions); and disclosure of additional
information about the effects on periodic benefit cost for the
following fiscal year arising from delayed recognition in the
current period. The requirement to recognize the funded status
of the plan on the balance sheet is required for the fiscal year
ended January 27, 2007 and is reflected in our accompanying
financial statements. The adjustment to accumulated other
comprehensive income of initially applying the recognition
provisions of SFAS No. 158 was a reduction, net of
taxes, of $5.6 million. The requirement to measure the plan
assets and obligations as of the balance sheet date can be
deferred until our fiscal year ending January 2008. The current
measurement date of our plans is December 31 and we have elected
to defer adopting the measurement provisions until next fiscal
year. The impact of applying the measurement provisions of
SFAS No. 158 will not have a material impact on our
statement of financial position.

In June 2006, the FASB issued FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109
(FIN 48). FIN 48 clarifies the accounting for
uncertainties in income taxes recognized in an enterprises
financial statements. The Interpretation requires that we
determine whether it is more likely than not that a tax position
will be sustained upon examination by the appropriate taxing
authority. If a tax position meets the more likely than not
recognition criteria, FIN 48 requires the tax position be
measured at the largest amount of benefit greater than 50%
likely of being realized upon ultimate settlement. FIN 48
must be applied to all existing tax positions upon initial
adoption. This accounting standard is effective for fiscal years
beginning after December 15, 2006 (fiscal 2008 for the
Company). Upon adoption, we anticipate an increase to our
reserves for uncertain tax positions. We do not expect that the
impact will be material to our financial statements.

In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements (SFAS No. 157).
SFAS No. 157 defines fair value, establishes a
framework for measuring fair value and requires enhanced
disclosures about fair value measurements.
SFAS No. 157 requires companies to disclose the fair
value of their financial instruments according to a fair value
hierarchy as defined in the standard. Additionally, companies
are required to provide enhanced disclosure regarding financial
instruments in one of the categories (level 3), including a
reconciliation of the beginning and ending balances separately
for each major category of assets and liabilities.
SFAS No. 157 is effective for financial statements

40

issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. We believe the
adoption of SFAS No. 157 will not have a material
impact on our results of operations or financial condition.

ITEM 7A. Quantitative
and Qualitative Disclosure about Market Risk

We do not enter into derivatives for speculative or trading
purposes.

Foreign
Currency Exchange Rate Risk

We are exposed to foreign currency exchange rate risk on our
investment in our Canadian (Winners and HomeSense) and European
(T.K. Maxx) operations. As more fully described in Notes A
and E to the consolidated financial statements, we hedge a
significant portion of our net investment in foreign operations;
intercompany transactions with these operations; and certain
merchandise purchase commitments incurred by these operations;
with derivative financial instruments. We enter into derivative
contracts only when there is an underlying economic exposure. We
utilize currency forward and swap contracts, designed to offset
the gains or losses in the underlying exposures; most of these
gains and losses are recorded directly in shareholders
equity. The contracts are executed with banks we believe are
creditworthy and are denominated in currencies of major
industrial countries. We have performed a sensitivity analysis
assuming a hypothetical 10% adverse movement in foreign currency
exchange rates applied to the hedging contracts and the
underlying exposures described above. As of January 27,
2007, the analysis indicated that such an adverse movement would
not have a material effect on our consolidated financial
position, results of operations or cash flows.

Interest
Rate Risk

Our cash equivalents and short-term investments and certain
lines of credit bear variable interest rates. Changes in
interest rates affect interest earned and paid by TJX. In
addition, changes in the gross amount of our borrowings will
affect the impact on our future interest expense of future
changes in interest rates. We occasionally enter into financial
instruments to manage our cost of borrowing; however, we believe
that the use of primarily fixed rate debt minimizes our exposure
to market conditions. We have performed a sensitivity analysis
assuming a hypothetical 10% adverse movement in interest rates
applied to the maximum variable rate debt outstanding during the
previous year. As of January 27, 2007, the analysis
indicated that such an adverse movement would not have a
material effect on our consolidated financial position, results
of operations or cash flows.

Market Risk

The assets of our qualified pension plan, a large portion of
which is invested in equity securities, are subject to the risks
and uncertainties of the public stock market. We allocate the
pension assets in a manner that attempts to minimize and control
our exposure to these market uncertainties.

ITEM 8.

Financial
Statements and Supplementary Data

The information required by this item may be found on pages F-1
through F-34 of this Annual Report on
Form 10-K.

ITEM 9.

Changes in
and Disagreements with Accountants on Accounting and Financial
Disclosure

Not applicable.

ITEM 9A.

Controls and
Procedures

(a)

Evaluation
of Disclosure Controls and Procedures

We have carried out an evaluation, under the supervision and
with the participation of our management, including our Chief
Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure
controls and procedures, as defined in
Rules 13a-15(e)
and 15d-15(e) under the Exchange Act, as of the end of the
period covered by this report pursuant to
Rules 13a-15
and 15d-15 of the Exchange Act. Based upon that

41

evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures
are effective in ensuring that information required to be
disclosed by us in the reports that we file or submit under the
Exchange Act is (i) recorded, processed, summarized and
reported, within the time periods specified in the SECs
rules and forms; and (ii) accumulated and communicated to
our management, including our principal executive and principal
financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required
disclosures. Management recognizes that any controls and
procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving their objectives
and management necessarily applies its judgment in evaluating
the cost-benefit relationship of possible controls and
procedures.

(b)

Changes in
Internal Control Over Financial Reporting

There were no changes in our internal control over financial
reporting (as defined in
Rules 13a-15(f)
and 15d-15(f) under the Exchange Act) during the fourth quarter
of fiscal 2007 identified in connection with our Chief Executive
Officers and Chief Financial Officers evaluation
that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.

(c)

Managements
Annual Report on Internal Control Over Financial Reporting

The management of TJX is responsible for establishing and
maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in
Rules 13a-15(f)
and 15d  15(f) promulgated under the Securities
Exchange Act of 1934, as amended, as a process designed by, or
under the supervision of, TJXs principal executive and
principal financial officers, or persons performing similar
functions, and effected by TJXs board of directors,
management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles and
includes those policies and procedures that:



Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions
of the assets of TJX;



Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of TJX are being made only in
accordance with authorizations of management and directors of
TJX; and



Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of
TJXs assets that could have a material effect on the
financial statements.

Our internal control system was designed to provide reasonable
assurance to our management and Board of Directors regarding the
preparation and fair presentation of published financial
statements. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to
financial statement preparation and presentation. Also,
projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of TJXs
management, including its Chief Executive Officer and Chief
Financial Officer, TJX conducted an evaluation of the
effectiveness of its internal control over financial reporting
as of January 27, 2007 based on the framework in
Internal Control  Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on that evaluation,
management concluded that its internal control over financial
reporting was effective as of January 27, 2007.

(d) Attestation
Report of the Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP, the independent registered public
accounting firm, that audited and reported on our consolidated
financial statements contained herein, has audited
managements assessment of our internal control over
financial reporting as of January 27, 2007, and has issued
an attestation report on managements assessment of our
internal control over financial reporting included herein.

ITEM 9B. Other
Information

None.

42

PART III

ITEM 10. Directors,
Executive Officers and Corporate Governance

TJX will file with the Securities and Exchange Commission a
definitive proxy statement no later than 120 days after the
close of its fiscal year ended January 27, 2007 (the Proxy
Statement). The information required by this Item and not given
in Item 4A, under the caption Executive Officers of
the Registrant, will appear under the headings
Election of Directors, Corporate
Governance, Audit Committee Report and
Section 16(a) Beneficial Ownership Reporting
Compliance in our Proxy Statement, which sections are
incorporated in this item by reference.

TJX has a Code of Ethics for TJX Executives governing our
Chairman, Vice Chairman, Chief Executive Officer, President,
Chief Administrative Officer, Chief Financial Officer, Principal
Accounting Officer and other senior operating, financial and
legal executives. The Code of Ethics for TJX Executives is
designed to ensure integrity in our financial reports and public
disclosures. TJX also has a Code of Conduct and Business Ethics
for Directors which promotes honest and ethical conduct,
compliance with applicable laws, rules and regulations and the
avoidance of conflicts of interest. Both of these codes of
conduct are published on our website at www.tjx.com. We
intend to disclose any future amendments to, or waivers from,
the Code of Ethics for TJX Executives or the Code of Business
Conduct and Ethics for Directors within four business days of
the waiver or amendment through a website posting or by filing a
Current Report on
Form 8-K
with the Securities and Exchange Commission.

ITEM 11. Executive
Compensation

The information required by this Item will appear under the
heading Executive Compensation in our Proxy
Statement, which section is incorporated in this item by
reference.

The information required by this Item will appear under the
headings Transactions with Related Persons and
Corporate Governance in our Proxy Statement, which
sections are incorporated in this item by reference.

ITEM 14. Principal
Accountant Fees and Services

The information required by this Item will appear under the
heading Audit Committee Report in our Proxy
Statement, which section is incorporated in this item by
reference.

43

PART IV

ITEM 15. Exhibits,
Financial Statement Schedules

(a) Financial Statement Schedules

For a list of the consolidated financial information included
herein, see Index to the Consolidated Financial Statements on
page F-1.

Listed below are all exhibits filed as part of this report. Some
exhibits are filed by the Registrant with the Securities and
Exchange Commission pursuant to
Rule 12b-32
under the Securities Exchange Act of 1934, as amended.

Exhibit

No.

Description of Exhibit

3(i)

.1

Fourth Restated Certificate of
Incorporation is incorporated herein by reference to
Exhibit 99.1 to the
Form 8-A/A
filed September 9, 1999. Certificate of Amendment of Fourth
Restated Certificate of Incorporation is incorporated herein by
reference to Exhibit 3(i) to the
Form 10-Q
filed for the quarter ended July 28, 2005.

3(ii)

.1

The by-laws of TJX, as amended,
are incorporated herein by reference to Exhibit 3(ii) to
the
Form 10-Q
filed for the quarter ended July 28, 2005.

4

.1

Indenture between TJX and The Bank
of New York dated as of February 13, 2001, incorporated by
reference to Exhibit 4.1 of the Registration Statement on
Form S-3
filed on May 9, 2001.

Each other instrument relates to
long-term debt securities the total amount of which does not
exceed 10% of the total assets of TJX and its subsidiaries on a
consolidated basis. TJX agrees to furnish to the Securities and
Exchange Commission copies of each such instrument not otherwise
filed herewith or incorporated herein by reference.

10

.1

4-year
Revolving Credit Agreement dated May 5, 2005 among various
financial institutions as lenders, including Bank of America,
N.A., JP Morgan Chase Bank, National Association, The Bank of
New York, Citizens Bank of Massachusetts, Key Bank National
Association and Union Bank of California, N.A., as co-agents is
incorporated herein by reference to Exhibit 10.1 to the
Form 8-K
filed May 6, 2005. The related Amendment No. 1 to the
4-year
Revolving Credit Agreement dated May 12, 2006 is
incorporated herein by reference to Exhibit 10.1 to the
Form 8-K
filed May 17, 2006.

44

Exhibit

No.

Description of Exhibit

10

.2

5-year
Revolving Credit Agreement dated May 5, 2005 among various
financial institutions as lenders, including Bank of America,
N.A., JP Morgan Chase Bank, National Association, The Bank of
New York, Citizens Bank of Massachusetts, Key Bank National
Association and Union Bank of California, N.A., as co-agents is
incorporated herein by reference to Exhibit 10.2 to the
Form 8-K
filed May 6, 2005. The related Amendment No. 1 to the
5-year
Revolving Credit Agreement dated May 12, 2006 is
incorporated herein by reference to Exhibit 10.2 to the
Form 8-K
filed May 17, 2006.

10

.3

The Employment Agreement dated as
of June 3, 2003 between Edmond J. English and TJX is
incorporated herein by reference to Exhibit 10.1 to the
Form 10-Q
filed for the quarter ended July 26, 2003. The Letter
Agreement dated September 13, 2005 between Edmond J.
English and TJX is incorporated herein by reference to
Exhibit 10.1 to the
Form 8-K
filed September 16, 2005.*

10

.4

The Employment Agreement dated as
of June 6, 2006 between Bernard Cammarata and TJX is
incorporated herein by reference to Exhibit 10.1 to the
Form 8-K
filed June 9, 2006.*

10

.5

The Employment Agreement dated as
of April 5, 2005 with Donald G. Campbell is incorporated
herein by reference to Exhibit 10.2 to
Form 8-K
filed on April 7, 2005. The Letter Agreement dated
September 7, 2005 with Donald G. Campbell is incorporated
herein by reference to Exhibit 10.7 to the
Form 10-Q
filed for the quarter ended October 29, 2005. The Amendment
dated as of March 7, 2006 to the Employment Agreement dated
as of April 5, 2005 with Donald G. Campbell, as amended, is
incorporated herein by reference to Exhibit 10.4 to the
Form 8-K
filed March 8, 2006. The Letter Agreement dated
September 6, 2006 with Donald G. Campbell is incorporated
herein by reference to Exhibit 10.1 to the
Form 8-K
filed September 7, 2006.*

10

.6

The Employment Agreement dated as
of October 17, 2005 with Carol Meyrowitz is incorporated
herein by reference to Exhibit 10.1 to the
Form 8-K
filed on October 12, 2005. The Amendment dated as of March
7, 2006 to the Employment Agreement dated as of October 17,
2005 with Carol Meyrowitz, is incorporated herein by reference
to Exhibit 10.2 to the
Form 8-K
filed March 8, 2006.*

10

.7

The Employment Agreement dated as
of April 5, 2005 with Arnold Barron is incorporated herein
by reference to Exhibit 10.1 to the
Form 8-K
filed on April 7, 2005. The Letter Agreement dated
September 7, 2005 with Arnold Barron is incorporated herein
by reference to Exhibit 10.6 to the
Form 10-Q
filed for the quarter ended October 29, 2005. The Letter
Agreement dated October 17, 2005 with Arnold Barron is
incorporated herein by reference to Exhibit 10.9 to the
Form 10-Q
filed for the quarter ended October 29, 2005. The Amendment
dated as of March 7, 2006 to the Employment Agreement dated
as of April 5, 2005 with Arnold Barron, as amended, is
incorporated herein by reference to Exhibit 10.3 to the
Form 8-K
filed March 8, 2006.*

10

.8

The Employment Agreement dated as
of April 5, 2005 with Alexander Smith is incorporated
herein by reference to Exhibit 10.3 to the
Form 8-K
filed on April 7, 2005. The Letter Agreement dated
September 7, 2005 with Alexander Smith is incorporated
herein by reference to Exhibit 10.8 to the
Form 10-Q
filed for the quarter ended October 29, 2005. The Letter
Agreement dated October 17, 2005 with Alexander Smith is
incorporated herein by reference to Exhibit 10.10 to the
Form 10-Q
filed for the quarter ended October 29, 2005. The Amendment
dated as of March 7, 2006 to the Employment Agreement dated
as of April 5, 2005 with Alexander Smith, as amended, is
incorporated herein by reference to Exhibit 10.5 to the
Form 8-K
filed March 8, 2006.*

10

.9

The Employment Agreement dated as
of April 5, 2005 with Jeffrey Naylor and the related
Amendments dated as of September 7, 2005, March 7,
2006 and September 6, 2006 to the Employment Agreement
dated as of April 5, 2005 with Jeffrey Naylor are all filed
herewith.*

10

.10

The TJX Companies, Inc. Management
Incentive Plan, as amended, is incorporated herein by reference
to Exhibit 10.2 to the
Form 10-Q
filed for the quarter ended July 26, 1997. *

10

.11

The Stock Incentive Plan, as
amended and restated through June 1, 2004, is incorporated
herein by reference to Exhibit 10.1 to the
Form 10-Q
filed for the quarter ended July 31, 2004. The related
First Amendment to The Stock Incentive Plan is incorporated
herein by reference to Exhibit 10.11 to the
Form 10-K
filed for the fiscal year ended January 28, 2006. The Stock
Incentive Plan, as amended through June 5, 2006, is
incorporated herein by reference to Exhibit 10.1 to the
Form 10-Q
filed for the quarter ended July 29, 2006.*

10

.12

The Form of a Non-Qualified Stock
Option Certificate Granted Under the Stock Incentive Plan is
incorporated herein by reference to Exhibit 10.2 to the
Form 10-Q
filed for the quarter ended July 31, 2004.*

10

.13

The Form of a Performance-Based
Restricted Stock Award Granted Under Stock Incentive Plan is
incorporated herein by reference to Exhibit 10.3 to the
Form 10-Q
filed for the quarter ended July 31, 2004.*

10

.14

The Form of a Performance-Based
Restricted Stock Award Granted Under Stock Incentive Plan is
incorporated herein by reference to Exhibit 10.2 to the
Form 8-K
filed November 17, 2005.*

45

Exhibit

No.

Description of Exhibit

10

.15

Description of Director
Compensation Arrangements is incorporated herein by reference to
Exhibit 10.15 to the
Form 10-K
for the fiscal year ended January 28, 2006. Insofar as the
description relates to the director deferred share awards, it
has been superseded by the Stock Incentive Plan, as amended
through June 5, 2006, as referenced in Exhibit 10.11.*

10

.16

The TJX Companies, Inc. Long Range
Performance Incentive Plan, as amended, is incorporated herein
by reference to Exhibit 10.3 to the
Form 10-Q
filed for the quarter ended July 26, 1997. The Amendment to
The Long Range Performance Incentive Plan adopted on
September 7, 2005 is incorporated herein by reference to
Exhibit 10.11 to the
Form 10-Q
filed for the fiscal quarter ended October 29, 2005. *

10

.17

The General Deferred Compensation
Plan (1998 Restatement) and related First Amendment, effective
January 1, 1999, are incorporated herein by reference to
Exhibit 10.9 to the
Form 10-K
for the fiscal year ended January 30, 1999. The related
Second Amendment, effective January 1, 2000, is
incorporated herein by reference to Exhibit 10.10 to the
Form 10-K
filed for the fiscal year ended January 29, 2000. The
related Third and Fourth Amendments are incorporated herein by
reference to Exhibit 10.17 to the
Form 10-K
for the fiscal year ended January 28, 2006.*

10

.18

The Supplemental Executive
Retirement Plan, as amended, is incorporated herein by reference
to Exhibit 10(l) to the
Form 10-K
filed for the fiscal year ended January 25, 1992. The 2005
Restatement to the Supplemental Executive Retirement Plan is
incorporated herein by reference to Exhibit 10.18 to the
Form 10-K
for the fiscal year ended January 28, 2006.*

10

.19

The Executive Savings Plan and
related Amendments No. 1 and No. 2, effective as of
October 1, 1998, are incorporated herein by reference to
Exhibit 10.12 to the
Form 10-K
filed for the fiscal year ended January 30, 1999. The
related Third and Fourth Amendments are incorporated herein by
reference to Exhibit 10.19 to the
Form 10-K
for the fiscal year ended January 28, 2006.*

10

.20

The Restoration Agreement and
related letter agreement regarding conditional reimbursement
dated December 31, 2002 between TJX and Bernard Cammarata
are incorporated herein by reference to Exhibit 10.17 to
the
Form 10-K
filed for the fiscal year ended January 25, 2003. *

10

.21

The form of Indemnification
Agreement between TJX and each of its officers and directors is
incorporated herein by reference to Exhibit 10(r) to the
Form 10-K
filed for the fiscal year ended January 27, 1990. *

10

.22

The Trust Agreement dated as of
April 8, 1988 between TJX and State Street Bank and Trust
Company is incorporated herein by reference to
Exhibit 10(y) to the
Form 10-K
filed for the fiscal year ended January 30, 1988. *

10

.23

The Trust Agreement dated as of
April 8, 1988 between TJX and Fleet Bank (formerly Shawmut
Bank of Boston, N.A.) is incorporated herein by reference to
Exhibit 10(z) to the
Form 10-K
filed for the fiscal year ended January 30, 1988. *

10

.24

The Trust Agreement for Executive
Savings Plan dated as of January 1, 2005 between TJX and
Wells Fargo Bank, N.A. is incorporated herein by reference to
Exhibit 10.26 to the
Form 10-K
filed for the fiscal year ended January 29, 2005. *

10

.25

The Distribution Agreement dated
as of May 1, 1989 between TJX and HomeBase, Inc. (formerly
Waban Inc.) is incorporated herein by reference to
Exhibit 3 to TJXs Current Report on
Form 8-K
dated June 21, 1989. The First Amendment to Distribution
Agreement dated as of April 18, 1997 between TJX and
HomeBase, Inc. (formerly Waban Inc.) is incorporated herein by
reference to Exhibit 10.22 to the
Form 10-K
filed for the fiscal year ended January 25, 1997.

10

.26

The Indemnification Agreement
dated as of April 18, 1997 by and between TJX and BJs
Wholesale Club, Inc. is incorporated herein by reference to
Exhibit 10.23 to the
Form 10-K
filed for the fiscal year ended January 25, 1997.

21

Subsidiaries:

A list of the Registrants
subsidiaries is filed herewith.

23

Consents of Independent
Registered Public Accounting Firm

The Consent of
PricewaterhouseCoopers LLP is filed herewith.

24

Power of Attorney:

The Power of Attorney given by the
Directors and certain Executive Officers of TJX is filed
herewith.

31

.1

Certification Statement of Chief
Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 is filed herewith.

31

.2

Certification Statement of Chief
Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 is filed herewith.

46

Exhibit

No.

Description of Exhibit

32

.1

Certification Statement of Chief
Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 is filed herewith.

32

.2

Certification Statement of Chief
Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 is filed herewith.

* Management contract or
compensatory plan or arrangement.

47

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

THE TJX COMPANIES, INC.

/s/ Jeffrey
G. Naylor

Jeffrey G. Naylor, Senior Executive Vice President and Chief
Financial and Administrative Officer, on behalf of The TJX
Companies, Inc. and as Principal Financial and Accounting
Officer of The TJX Companies, Inc.

Dated: March 28, 2007

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
date indicated.

We have completed integrated audits of The TJX Companies,
Inc.s 2007 and 2006 consolidated financial statements and
of its internal control over financial reporting as of
January 27, 2007, in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Our
opinions, based on our audits, are presented below.

Consolidated
financial statements and financial statement schedule

In our opinion, the consolidated financial statements listed in
the accompanying index present fairly, in all material respects,
the financial position of The TJX Companies, Inc. and its
subsidiaries (the Company) at January 27, 2007
and January 28, 2006, and the results of their operations
and their cash flows for each of the three years in the period
ended January 27, 2007 in conformity with accounting
principles generally accepted in the United States of America.
In addition, in our opinion, the financial statement schedule
listed in the accompanying index presents fairly, in all
material respects, the information set forth therein when read
in conjunction with the related consolidated financial
statements. These financial statements and financial statement
schedule are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on
our audits. We conducted our audits of these statements in
accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit of financial statements includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.

As discussed in Note J to the accompanying consolidated
financial statements, effective January 27, 2007, the
Company adopted Statement of Financial Accounting Standards
No. 158, Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans  an amendment
of FASB Statements No. 87, 88, 106 and 132(R), as of
January 27, 2007.

Internal
control over financial reporting

Also, in our opinion, managements assessment, included in
Managements Annual Report on Internal Control Over
Financial Reporting appearing under Item 9A, that the
Company maintained effective internal control over financial
reporting as of January 27, 2007 based on criteria
established in Internal Control  Integrated
Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), is fairly
stated, in all material respects, based on those criteria.
Furthermore, in our opinion, the Company maintained, in all
material respects, effective internal control over financial
reporting as of January 27, 2007, based on criteria
established in Internal Control  Integrated
Framework issued by the COSO. The Companys management
is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness
of internal control over financial reporting. Our responsibility
is to express opinions on managements assessment and on
the effectiveness of the Companys internal control over
financial reporting based on our audit. We conducted our audit
of internal control over financial reporting in accordance with
the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was
maintained in all material respects. An audit of internal
control over financial reporting includes obtaining an
understanding of internal control over financial reporting,
evaluating managements assessment, testing and evaluating
the design and operating effectiveness of internal control, and
performing such other procedures as we consider necessary in the
circumstances. We believe that our audit provides a reasonable
basis for our opinions.

A companys internal control over financial reporting is a
process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A companys
internal control over financial reporting includes those
policies and procedures that (i) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of
financial statements in accordance with

F-2

generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance
with authorizations of management and directors of the company;
and (iii) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or
disposition of the companys assets that could have a
material effect on the financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

Basis of Presentation: The consolidated
financial statements of The TJX Companies, Inc. (referred to as
TJX, the Company or we)
include the financial statements of all of TJXs
subsidiaries, all of which are wholly owned. All of TJXs
activities are conducted within TJX or our subsidiaries and are
consolidated in these financial statements. All intercompany
transactions have been eliminated in consolidation.

Fiscal Year: TJXs fiscal year ends on
the last Saturday in January. The fiscal years ended
January 27, 2007 (fiscal 2007),
January 28, 2006 (fiscal 2006) and
January 29, 2005 (fiscal 2005) each included
52 weeks.

Use of Estimates: The preparation of the
financial statements, in conformity with accounting principles
generally accepted in the United States, requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities, and disclosure of contingent
liabilities, at the date of the financial statements as well as
the reported amounts of revenues and expenses during the
reporting period. TJX considers the more significant accounting
policies that involve management estimates and judgments to be
those relating to inventory valuation, retirement obligations,
casualty insurance, accounting for taxes, reserves for
discontinued operations and loss contingencies. Actual amounts
could differ from those estimates.

Revenue Recognition: TJX records revenue at
the time of sale and receipt of merchandise by the customer, net
of a reserve for estimated returns. We estimate returns based
upon our historical experience. We defer recognition of a
layaway sale and its related profit to the accounting period
when the customer receives layaway merchandise. Proceeds from
the sale of gift cards are deferred until the customer uses the
gift card to acquire merchandise. Based on historical experience
we estimate the amount of gift cards that will not be redeemed
and, to the extent allowed by local law, these amounts are
amortized into income over the redemption period.

Consolidated Statements of Income
Classifications: Cost of sales, including buying
and occupancy costs, include the cost of merchandise sold and
gains and losses on inventory-related derivative contracts;
store occupancy costs (including real estate taxes, utility and
maintenance costs, and fixed asset depreciation); the costs of
operating our distribution centers; payroll, benefits and travel
costs directly associated with buying inventory; and systems
costs related to the buying and tracking of inventory.

Selling, general and administrative expenses include store
payroll and benefit costs; communication costs; credit and check
expenses; advertising; administrative and field management
payroll, benefits and travel costs; corporate administrative
costs and depreciation; gains and losses on non-inventory
related foreign currency exchange contracts; and other
miscellaneous income and expense items.

Cash and Cash Equivalents: TJX generally
considers highly liquid investments with a maturity of three
months or less at the date of purchase to be cash equivalents.
Our investments are primarily high-grade commercial paper,
institutional money market funds and time deposits with major
banks. The fair value of cash equivalents approximates carrying
value.

Merchandise Inventories: Inventories are
stated at the lower of cost or market. TJX uses the retail
method for valuing inventories on the
first-in
first-out basis. We almost exclusively utilize a permanent
markdown strategy and lower the cost value of the inventory that
is subject to markdown at the time the retail prices are lowered
in our stores. We accrue for inventory obligations at the time
inventory is shipped rather than when received and accepted by
TJX. At January 27, 2007 and January 28, 2006, the
amount of in-transit inventory included in merchandise
inventories on the balance sheet was $346.2 million and
$340.6 million, respectively. A comparable amount is
reflected in accounts payable.

Common Stock and Equity: Equity transactions
consist primarily of the repurchase of our common stock under
our stock repurchase program and the issuance of common stock
under our stock incentive plan. Under the stock repurchase
program we repurchase our common stock on the open market. The
par value of the shares repurchased is charged to common stock
with the excess of the purchase price over par first charged
against any available additional paid-in capital
(APIC) and the balance charged to retained earnings.
Due to the high volume of repurchases over the past several
years we have no remaining balance in APIC. All shares
repurchased have been retired.

F-8

Shares issued under our stock incentive plan are generally
issued from authorized but previously unissued shares, and
proceeds received are recorded by increasing common stock for
the par value of the shares with the excess over par added to
APIC. Income tax benefits upon the expensing of options result
in the creation of a deferred tax asset, while income tax
benefits due to the exercise of stock options reduce deferred
tax assets to the extent that an asset for the related grant has
been created. Any tax benefit greater than the deferred tax
asset created at the time of expensing the option is credited to
APIC; any deficiency in the tax benefit is debited to APIC to
the extent a pool for such deficiency exists. In the
absence of a pool any deficiency is realized in the related
periods statements of income through the provision for
income taxes. The excess income tax benefits, if any, are
included in cash flows from financing activities in the
statements of cash flows. The par value of restricted stock
awards is also added to common stock when the stock is issued,
generally at grant date. The fair value of the restricted stock
awards in excess of par value is added to APIC as the award is
amortized into earnings over the related vesting period.

Stock-Based Compensation: TJX adopted the
provisions of Statement of Financial Accounting Standards
No. 123 (revised 2004) Share-Based
Payment (SFAS No. 123(R)) in its fourth
quarter reporting period of fiscal 2006. TJX elected the
modified retrospective transition method and accordingly all
periods presented reflect the impact of adopting
SFAS No. 123(R). For purposes of applying the
provisions of SFAS No. 123(R), the fair value of each
option granted is estimated on the date of grant using the
Black-Scholes option pricing model. See Note G for a
detailed discussion of stock-based compensation.

Interest: TJXs interest expense, net was
$15.6 million, $29.6 million and $25.8 million in
fiscal 2007, 2006 and 2005, respectively. Interest expense is
presented net of interest income of $23.6 million,
$9.4 million and $7.7 million in fiscal 2007, 2006 and
2005, respectively. We capitalize interest during the active
construction period of major capital projects. Capitalized
interest is added to the cost of the related assets. No interest
was capitalized in fiscal 2007, 2006 or 2005. Debt discount and
related issue expenses are amortized to interest expense over
the lives of the related debt issues or to the first date the
holders of the debt may require TJX to repurchase such debt.

Depreciation and Amortization: For financial
reporting purposes, TJX provides for depreciation and
amortization of property by the use of the straight-line method
over the estimated useful lives of the assets. Buildings are
depreciated over 33 years. Leasehold costs and improvements
are generally amortized over their useful life or the committed
lease term (typically 10 years), whichever is shorter.
Furniture, fixtures and equipment are depreciated over 3 to
10 years. Depreciation and amortization expense for
property was $347.0 million for fiscal 2007,
$307.7 million for fiscal 2006 and $268.0 million for
fiscal 2005. Amortization expense for property held under a
capital lease was $2.2 million in fiscal 2007, 2006 and
2005. Maintenance and repairs are charged to expense as
incurred. Significant costs incurred for internally developed
software are capitalized and amortized over 3 to 10 years.
Upon retirement or sale, the cost of disposed assets and the
related accumulated depreciation are eliminated and any gain or
loss is included in net income. Pre-opening costs, including
rent, are expensed as incurred.

Lease Accounting: During fiscal 2005, we
recorded a one-time non-cash charge to conform our accounting
policies to generally accepted accounting principles related to
the timing of rent expense for certain leased locations.
Previously, we began recording rent expense at the time a store
opened and the lease term commenced as specified in the lease.
Beginning in the fourth quarter of fiscal 2005, we record rent
expense when we take possession of a store, which occurs before
the commencement of the lease term, as specified in the lease,
and generally 30 to 60 days prior to the opening of the
store. This will result in an acceleration of the commencement
of rent expense for each lease, as we record rent expense during
the pre-opening period, but a reduction in monthly rent expense,
as the total rent due under the lease is amortized over a
greater number of months.

This correction resulted in a one-time, cumulative, non-cash
charge of $30.7 million on a pre tax basis
($19.3 million net of tax), or $0.04 per share, which
we recorded in the fourth quarter of fiscal 2005. The pre-tax
cumulative effect of the correction reduced segment profit as
follows; Marmaxx $16.8 million, Winners and HomeSense
$3.5 million, T.K. Maxx $6.5 million, HomeGoods
$2.2 million and A.J. Wright $1.7 million.

Impairment of Long-Lived Assets: TJX
periodically reviews the value of its property and intangible
assets in relation to the current and expected operating results
of the related business segments in order to assess whether
there has been an other than temporary impairment of their
carrying values. An impairment exists when the undiscounted cash
flow of an asset is less than the carrying cost of that asset.
Store-by-store
impairment analysis is performed at a minimum on an annual basis
in the fourth quarter of a fiscal year.

F-9

Goodwill and Tradename: Goodwill is primarily
the excess of the purchase price paid over the carrying value of
the minority interest acquired in fiscal 1990 in TJXs
former 83%-owned subsidiary and represents goodwill associated
with the T.J. Maxx chain which is included in the Marmaxx
segment in all periods presented. In addition, goodwill includes
the excess of cost over the estimated fair market value of the
net assets of Winners acquired by TJX in fiscal 1991.

Goodwill, net of amortization, totaled $71.9 million,
$72.0 million and $71.8 million as of January 27,
2007, January 28, 2006 and January 29, 2005,
respectively, and is considered to have an indefinite life and,
accordingly is no longer amortized. Cumulative amortization was
$33.0 million as of January 27, 2007,
$33.1 million as of January 28, 2006 and
$33.0 million at January 29, 2005. Changes in goodwill
cost and accumulated amortization are attributable to the effect
of exchange rate changes on Winners reported goodwill.

Tradenames include the values assigned to the name
Marshalls, acquired by TJX in fiscal 1996 when we
acquired the Marshalls chain, and to the name Bobs
Stores acquired by TJX in December 2003 when we acquired
substantially all of the assets of Bobs Stores. These
values were determined by the discounted present value of
assumed after-tax royalty payments, offset by a reduction for
their pro-rata share of negative goodwill.

The Marshalls tradename, net of accumulated amortization, is
carried at a value of $107.7 million, and is considered to
have an indefinite life and, accordingly, is no longer
amortized. The Bobs Stores tradename, pursuant to the
purchase accounting method, was valued at $4.8 million
which is being amortized over 10 years. Amortization
expense of $477,000, $477,000 and $483,000 was recognized in
fiscal 2007, 2006 and 2005, respectively. Cumulative
amortization as of January 27, 2007, January 28, 2006
and January 29, 2005 was $1.5 million, $993,000 and
$516,000, respectively.

TJX occasionally acquires other trademarks in connection with
private label merchandise. Such trademarks are included in other
assets and are amortized to cost of sales, including buying and
occupancy costs, over the term of the agreement generally from 7
to 10 years. Amortization expense related to trademarks was
$499,000, $492,000 and $492,000 in fiscal 2007, 2006 and 2005,
respectively. The Company had $1.7 million,
$2.2 million and $2.7 million in trademarks, net of
accumulated amortization, at January 27, 2007,
January 28, 2006 and January 29, 2005, respectively.
Trademarks and the related amortization are included in the
related operating segment for which they were acquired.

An impairment analysis is performed for goodwill and tradenames
at a minimum on an annual basis in the fourth quarter of a
fiscal year. No impairments have been recorded on these assets
to date.

Accumulated Other Comprehensive Income
(Loss): TJXs foreign assets and liabilities
are translated at the fiscal year end exchange rate. Activity of
the foreign operations that affect the statements of income and
cash flows are translated at the average exchange rates
prevailing during the fiscal year. The translation adjustments
associated with the foreign operations are included in
shareholders equity as a component of accumulated other
comprehensive income. Cumulative foreign currency translation
adjustments included in shareholders equity amounted to a
loss of $3.2 million, net of related tax effect of
$15.8 million, as of January 27, 2007; a loss of
$23.6 million, net of related tax effect of
$17.7 million, as of January 28, 2006; and a gain of
$8.9 million, net of related tax effect of
$11.0 million, as of January 29, 2005.

TJX enters into financial instruments to manage our cost of
borrowing and to manage our exposure to changes in foreign
currency exchange rates. TJX recognizes all derivative
instruments as either assets or liabilities in the statements of
financial position and measures those instruments at fair value.
Changes to the fair value of derivative contracts that do not
qualify for hedge accounting are reported in earnings in the
period of the change. For derivatives that qualify for hedge
accounting, changes in the fair value of the derivatives are
either recorded in shareholders equity as a component of
other comprehensive income or are recognized currently in
earnings, along with an offsetting adjustment against the basis
of the item being hedged. Cumulative gains and losses on
derivatives that have hedged our net investment in foreign
operations and deferred gains or losses on cash flow hedges that
have been recorded in other comprehensive income amounted to a
loss of $25.2 million, net of related tax effects of
$16.8 million at January 27, 2007; a loss of
$20.7 million, net of related tax effects of
$13.8 million at January 28, 2006; and a loss of
$35.1 million, net of related tax effects of
$23.4 million as of January 29, 2005.

F-10

The requirement to recognize the funded status of our post
retirement benefit plans in accordance with
SFAS No. 158 (discussed below) resulted in a loss
adjustment to accumulated other comprehensive income of
$5.6 million, net of related tax effects of
$3.7 million at January 27, 2007. There was no similar
adjustment made in fiscal 2006 or 2005.

Loss Contingencies: TJX records a reserve for
loss contingencies when it is both probable that a loss has been
incurred and that the amount of the loss is reasonably
estimable. TJX reviews pending litigation and other
contingencies at least quarterly and adjusts the liability as
needed. TJX includes an estimate for related legal costs at the
time such costs are both probable and reasonably estimable.

New Accounting Standards: In September 2006,
the FASB issued Statement of Financial Accounting Standards
No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans  An
amendment of FASB Statements No. 87, 88, 106 and
132(R) (SFAS No. 158). SFAS No. 158
requires the recognition of the funded status of a benefit plan
in the balance sheet; the recognition in other comprehensive
income of gains or losses and prior service costs or credits
arising during the period but which are not included as
components of periodic benefit cost; the measurement of defined
benefit plan assets and obligations as of the balance sheet date
(the measurement provisions); and disclosure of additional
information about the effects on periodic benefit cost for the
following fiscal year arising from delayed recognition in the
current period. The recognition of the funded status of plans on
the balance sheet is required for our fiscal year ended
January 27, 2007 and is reflected in these financial
statements. The adjustment to accumulated other comprehensive
income of initially applying the recognition provisions of
SFAS No. 158 was a reduction, net of taxes, of
$5.6 million. The impact of adopting SFAS No. 158
on individual line items of the balance sheet as of
January 27, 2007 is summarized below:

The requirement to measure the plan assets and obligations as of
the balance sheet date can be deferred until our fiscal year
ending January 2008. The current measurement date of our plans
is December 31 and we have elected to defer adopting the
measurement provisions until next fiscal year. The impact of
applying the measurement provisions of SFAS No. 158
will not have a material effect on our statement of financial
position.

In June 2006, the FASB issued FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109
(FIN 48). FIN 48 clarifies the accounting for
uncertainties in income taxes recognized in an enterprises
financial statement. FIN 48 requires that we determine
whether it is more likely than not that a tax position will be
sustained upon examination by the appropriate taxing authority
and if so, recognize the largest amount of benefit greater than
50% likely of being realized upon ultimate settlement.
FIN 48 must be applied to all existing tax positions upon
initial adoption. This accounting standard is effective for
fiscal years beginning after December 15, 2006 (fiscal 2008
for the Company). Upon adoption, we anticipate an increase to
our reserves for uncertain tax positions. We do not expect that
the impact will be material to our financial statements.

In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements (SFAS No. 157).
SFAS No. 157 defines fair value, establishes a
framework for measuring fair value and requires enhanced
disclosures about fair value measurements.
SFAS No. 157 requires companies to disclose the fair
value of their financial instruments according to a fair value
hierarchy as defined in the standard. Additionally, companies
are required to provide enhanced disclosure regarding financial
instruments in one of the categories (level 3), including a
reconciliation of the beginning and ending balances separately
for each major category of assets and liabilities.
SFAS No. 157 is effective for financial statements

F-11

issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. We believe the
adoption of SFAS No. 157 will not have a material
impact on our results of operations or financial condition.

B. Contingency Related to Computer Intrusion

During the fourth quarter of fiscal 2007, TJX discovered that it
had suffered an unauthorized intrusion or intrusions into
portions of its computer system that process and store
information related to credit and debit card, check and
unreceipted merchandise return transactions (the intrusion or
intrusions, collectively, the Computer Intrusion).
TJX has been engaged in an ongoing investigation of the Computer
Intrusion, and computer security and incident response experts
have been engaged to assist in the investigation. TJX believes
that customer information was stolen in the Computer Intrusion
in 2005 and 2006 and that such information most likely primarily
relates to transactions at its stores (other than Bobs
Stores) during the periods 2003 through June 2004 and
mid-May2006 through mid-December 2006.

During the fourth quarter of fiscal 2007, we recorded a pre-tax
charge of approximately $5 million, or $0.01 per
share, for costs incurred through the fourth quarter in
connection with the Computer Intrusion, which includes costs
incurred to investigate and contain the Computer Intrusion,
strengthen computer security and systems, and communicate with
customers, and for technical, legal and other fees. In addition,
various litigation and claims have been (or may be) asserted
against us
and/or our
acquiring banks on behalf of customers (including various
putative class actions seeking in the aggregate to represent all
customers in the United States, Puerto Rico and Canada whose
transaction information was allegedly compromised by the
Computer Intrusion), banks and payment card companies seeking
damages allegedly arising out of the Computer Intrusion and
other related relief (including a putative class action seeking
to represent all financial institutions that issued payment
cards to our customers used at our stores during the period of
the Computer Intrusion) and shareholders. We intend to defend
such litigation and claims vigorously, although the outcome of
such litigation and claims cannot be predicted. In addition,
various governmental agencies are investigating the Computer
Intrusion, and we may be subject to fines or other obligations
as a result of these investigations. Certain banks have sought,
and other banks and payment card companies may seek, either
directly against us or through claims against our acquiring
banks as to which we may have an indemnity obligation, payment
of or reimbursement for fraudulent card charges and operating
expenses that they believe they have incurred by reason of the
Computer Intrusion, and payment card companies and associations
may seek to impose fines by reason of the Computer Intrusion. We
do not have sufficient information to reasonably estimate losses
that may result from such litigation, claims and investigations.
As such, no liability has been recorded as of January 27,
2007. We will continue to evaluate information as it becomes
known and will record an estimate for losses at the time or
times when it is both probable that a loss has been incurred and
the amount of the loss is reasonably estimable. Such losses
could be material to our results of operations and financial
condition.

C. Discontinued Operations  A.J. Wright store
closings

During the fourth quarter of fiscal 2007 management developed a
plan to close 34 underperforming A.J. Wright stores. The plan
was approved by the Executive Committee of the Board of
Directors on November 27, 2006, and virtually all of the
stores were closed as of the end of fiscal 2007.

In its continuing effort to improve the performance of A.J.
Wright, management performed an analysis of its store locations
and operating performance. Managements plan for the store
closures was based on several factors, including market
demographics and proximity to other A.J. Wright stores, cash
return, sales volume and productivity, recent comparable store
sales and profit trends and overall market performance. The 34
stores represented approximately 21% of A.J. Wrights store
base, but only 16% of its
year-to-date
sales and had store profit margins significantly below the
average of the A.J. Wright chain.

We recorded fourth quarter pre-tax charges of approximately
$62 million in connection with these A.J. Wright store
closures. A summary of the estimated charges (in millions) is
presented below:

Non-Cash

Cash

Total

Asset impairments

$

20

$

-

$

20

Lease costs, net of estimated
sublease income

-

38

38

Severance and other costs

-

4

4

Total pre-tax charges

$

20

$

42

$

62

F-12

Asset impairments relate primarily to store fixtures and
leasehold improvements. Lease costs include assumptions about
the timing and amount of subtenant income and other expenses and
actual results may cause the lease costs to vary from the above
estimate.

The above charges do not include the cash impact of
$24 million of estimated income tax benefits, which
generally will be realized when lease and severance obligations
are paid or assets are sold or otherwise disposed of. The
after-tax cost of the store closings of $38.1 million, or
$0.08 per share, was recorded as a loss on disposal of
discontinued operations in our fourth quarter and fiscal year
ending January 27, 2007.

In addition to the above charges, we classified the operating
income (loss) of the 34 closed stores for the current fiscal
year, as well as all prior periods, as a component of
discontinued operations. The operating income or loss for each
year equals the operating results from store operations, reduced
by an allocation of direct and incremental distribution and
administrative costs relating to the closed stores. No interest
expense was allocated to the discontinued operations. The
following table presents the net sales and segment profit (loss)
of the closed A.J. Wright stores for the last three fiscal years
which have been reclassified to discontinued operations:

Discontinued
operations:

Fiscal Year Ended January

Dollars in millions

2007

2006

2005

Net sales

$

111.8

$

102.0

$

52.7

Segment profit (loss)

(1.0

)

1.0

(0.8

)

Closed stores in operation during
period

34

33

22

D. Long-Term Debt and Credit Lines

The table below presents long-term debt, exclusive of current
installments, as of January 27, 2007 and January 28,
2006. All amounts are net of unamortized debt discounts. Capital
lease obligations are separately presented in Note F.

Aggregate maturities of long-term
debt, exclusive of current installments

$

785,645

The above maturity table assumes that all holders of the zero
coupon convertible subordinated notes exercise their put options
in fiscal 2014. Any of the notes on which put options are not
exercised, redeemed or converted will mature in fiscal 2022.

In January 2006, we entered into a C$235.0 million term
credit facility (through our Canadian division, Winners) due in
January, 2010. This debt is guaranteed by TJX. Interest is
payable on borrowings under this facility at rates equal to or
less than Canadian prime rate. The variable rate on this note
was 4.34% at January 27, 2007. The proceeds were used to
fund the repatriation of earnings from our Canadian division as
well as other general corporate purposes of this division.

In February 2001, TJX issued $517.5 million zero coupon
convertible subordinated notes due in February 2021 and raised
gross proceeds of $347.6 million. The issue price of the
notes represented a yield to maturity of 2% per year. Due to the
first put option on February 13, 2002, we amortized the
debt discount assuming a 1.5% yield for fiscal 2002. The notes
are subordinated to all existing and future senior indebtedness
of TJX. The notes are convertible into 16.9 million shares
of common stock of TJX if the sale price of our common stock
reaches specified thresholds, if the credit rating of the notes
is below investment grade, if the notes are called for
redemption or if certain specified corporate transactions occur
(see Note H). Each holder of the notes has the right to
require us to purchase the notes on February 13, 2013 at
original purchase price plus accrued original issue discount for
a total of $441.3 million for all notes. We may pay the
purchase price in cash, TJX stock or a combination of the two.
If the holders exercise their put options, we expect to fund the
payment with cash, financing from our short-term credit
facility, new long-term borrowings or a combination thereof.
There were two notes put to TJX on February 13, 2007 and
three on February 13, 2004. In addition, if a change in
control of TJX occurs on or before February 13, 2013, each
holder may require TJX to purchase for cash all or a portion of
such holders notes. We may redeem for cash all, or a
portion of, the notes at any time on or after February 13,
2007 for the original purchase price plus accrued original issue
discount.

The fair value of our general corporate debt, including current
installments, is estimated by obtaining market value quotes
given the trading levels of other bonds of the same general
issuer type and market perceived credit quality. The fair value
of our zero coupon convertible subordinated notes is estimated
by obtaining market quotes. The fair value of general corporate
debt, including current installments, at January 27, 2007
is $405.7 million versus a carrying value of
$394.6 million. The fair value of the zero coupon
convertible subordinated notes, as of January 27, 2007, is
$503.9 million versus a carrying value of
$391.0 million. These estimates do not necessarily reflect
certain provisions or restrictions in the various debt
agreements which might affect our ability to settle these
obligations.

In fiscal 2007, we amended our $500 million four-year
revolving credit facility and our $500 million five-year
revolving credit facility (initially entered into in fiscal
2006) to extend the maturity dates of these agreements
until May 2010 and May 2011, respectively. These agreements have
no compensating balance requirements and have various covenants
including a requirement of a specified ratio of debt to
earnings. We also have a commercial paper program pursuant to
which we issue commercial paper from time to time. The revolving
credit facilities are used as backup to our commercial paper
program. As of January 27, 2007 there were no outstanding
amounts under our credit facilities. The maximum amount of our
U.S. short-term borrowings outstanding was
$204.5 million during fiscal 2007, $566.5 million
during fiscal 2006 and $5.0 million during fiscal 2005. The
weighted average interest rate on our U.S. short-term
borrowings was 5.35% in fiscal 2007, 3.69% in fiscal 2006 and
2.04% in fiscal 2005.

F-14

As of January 27, 2007 and January 28, 2006 Winners
had two credit lines, one for C$10 million for operating
expenses and one C$10 million letter of credit facility.
The maximum amount outstanding under our Canadian credit line
for operating expenses was C$3.8 million in fiscal 2007,
C$4.6 million in fiscal 2006 and C$6.8 million in
fiscal 2005 and there were no amounts outstanding on either of
these lines at the end of fiscal 2007 or fiscal 2006. As of
January 27, 2007, T.K. Maxx had credit lines totaling
£20 million. The maximum amount outstanding in fiscal
2007 was £10.5 million and there were no outstanding
borrowings on this credit line at January 27, 2007.

E. Financial Instruments

TJX enters into financial instruments to manage our cost of
borrowing and to manage our exposure to changes in foreign
currency exchange rates.

Interest Rate Contracts: In December 1999,
prior to the issuance of the $200 million ten-year notes,
TJX entered into a rate-lock agreement to hedge the underlying
treasury rate of notes. The cost of this agreement is being
amortized to interest expense over the term of the notes and
results in an effective fixed rate of 7.60% on these notes.
During fiscal 2004, TJX entered into interest rate swaps on
$100 million of the $200 million ten-year notes
effectively converting the interest on that portion of the
unsecured notes from fixed to a floating rate of interest
indexed to the six-month LIBOR rate. The maturity dates of the
interest rate swaps is the same as the maturity date of the
underlying debt. Under these swaps, TJX pays a specified
variable interest rate and receives the fixed rate applicable to
the underlying debt. The interest income/expense on the swaps is
accrued as earned and recorded as an adjustment to the interest
expense accrued on the fixed-rate debt. The interest rate swaps
are designated as fair value hedges of the underlying debt. The
fair value of the contracts, excluding the net interest accrual,
amounted to a liability of $4.4 million, $4.6 million
and $2.9 million as of January 27, 2007,
January 28, 2006 and January 29, 2005, respectively.
The valuation of the swaps results in an offsetting fair value
adjustment to the debt hedged; accordingly, long-term debt has
been reduced by $4.4 million in fiscal 2007,
$4.6 million in fiscal 2006 and $2.9 million in fiscal
2005. The average effective interest rate, on the
$100 million of the 7.45% unsecured notes to which the
swaps apply, was approximately 9.42% in fiscal 2007, 8.30% in
fiscal 2006 and 6.45% in fiscal 2005.

During fiscal 2006, concurrent with the issuance of the
C$235 million three-year note, TJX entered an interest rate
swap on the principal amount of the note converting the interest
on the note from floating to a fixed rate of interest at
approximately 4.136%. The maturity date of the interest rate
swap is January 2009, one year before the maturity date of the
underlying debt. Under this swap, TJX pays a specified fixed
interest rate and receives the floating rate applicable to the
underlying debt. The interest income/expense on the swaps is
accrued as earned and recorded as an adjustment to the interest
expense accrued on the floating-rate debt. The interest rate
swap is designated as cash flow hedge of the underlying debt.
The fair value of the contract, excluding the net interest
accrual, amounted to an asset of $699,000 (C$825,000) as of
January 27, 2007 and an asset of $95,000 (C$110,000) at
January 28, 2006. The valuation of the swap results in an
offsetting adjustment to other comprehensive income. The average
effective interest rate on the note to which the swap applies
was approximately 4.48% in fiscal 2007.

Foreign Currency Contracts: TJX enters into
forward foreign currency exchange contracts to obtain economic
hedges on firm U.S. dollar and Euro merchandise purchase
commitments made by its foreign subsidiaries, T. K. Maxx (United
Kingdom) and Winners (Canada). These commitments are typically
six months or less in duration. The contracts outstanding at
January 27, 2007 covered certain commitments for the first
quarter of fiscal 2008. TJX elected not to apply hedge
accounting rules to these contracts. The change in the fair
value of these contracts resulted in income of $1.2 million
in fiscal 2007, expense of $2.5 million in fiscal 2006 and
income of $1.8 million in fiscal 2005. TJX also enters into
forward foreign currency exchange contracts to obtain economic
hedges on certain foreign intercompany payables, primarily
license fees, for which we elect not to apply hedge accounting
rules. There were no such contracts outstanding at
January 27, 2007. The change in fair value of these
contracts resulted in expense of $54,000 in fiscal 2006 and
income of $1.9 million in fiscal 2005. The gain or loss on
these contracts is ultimately offset by a similar gain or loss
on the underlying item being hedged.

TJX also enters into foreign currency forward and swap contracts
in both Canadian dollars and British pound sterling and accounts
for them as either a hedge of the net investment in and between
our foreign subsidiaries or as a cash flow hedge of certain
long-term intercompany debt. We apply hedge accounting to these
hedge contracts of our investment in foreign operations, and
changes in fair value of these contracts, as well as gains and
losses upon settlement, are recorded in accumulated other
comprehensive income, offsetting changes in the cumulative
foreign translation adjustments of our foreign divisions. The
change in fair value of the contracts designated as a hedge of
our

F-15

investment in foreign operations resulted in a loss of
$5.6 million, net of income taxes, in fiscal 2007, a gain
of $15.0 million, net of income taxes, in fiscal 2006, and
a gain of $3.8 million, net of income taxes, in fiscal
2005. The change in the cumulative foreign currency translation
adjustment resulted in a gain of $20.4 million, net of
income taxes, in fiscal 2007, a loss of $32.6 million, net
of income taxes, in fiscal 2006, and a loss of
$10.7 million, net of income taxes, in fiscal 2005. Amounts
included in other comprehensive income relating to cash flow
hedges are reclassified to earnings as the currency exposure on
the underlying intercompany debt impacts earnings. The net loss
recognized in fiscal 2007 related to cash flow contracts was
$5.0 million, net of income taxes. This amount was offset
by a non-taxable gain of $4.6 million, related to the
underlying exposure. The net loss recognized in fiscal 2006
related to cash flow contracts was $13.8 million, net of
income taxes. This amount was offset by a non-taxable gain of
$22.5 million, related to the underlying exposure. The net
loss recognized in fiscal 2005 related to cash flow contracts
and related underlying activity was $13.9 million, net of
income taxes. This amount was offset by a gain of
$11.9 million, net of income taxes, related to the
underlying exposure. On July 20, 2006 TJX determined that
the C$355 million intercompany loan, due from Winners to
TJX, would not be payable in the foreseeable future due to the
capital and cash flow needs of Winners. As a result, the
intercompany loan and the related currency swap were
re-designated as a net investment in a foreign operation.
Accordingly, future foreign currency gains or losses on the
intercompany loan and gains or losses on the related currency
swap, to the extent effective, will be recorded in other
comprehensive income. The ineffective portion of the currency
swap resulted in a pre-tax charge to the income statement of
$2.9 million in fiscal 2007.

TJX also enters into derivative contracts, generally designated
as fair value hedges, to hedge intercompany debt and
intercompany interest payable. The changes in fair value of
these contracts are recorded in the statements of income and are
offset by marking the underlying item to fair value in the same
period. Upon settlement, the realized gains and losses on these
contracts are offset by the realized gains and losses of the
underlying item in the statement of income. The net impact on
the income statement of hedging activity related to these
intercompany payables was immaterial in fiscal 2007, income of
$318,000 in fiscal 2006 and expense of $2.2 million in
fiscal 2005.

The value of foreign currency exchange contracts relating to
inventory commitments is reported in current earnings as a
component of cost of sales, including buying and occupancy
costs. The income statement impact of all other derivative
contracts and underlying exposures is reported as a component of
selling, general and administrative expenses.

Following is a summary of TJXs derivative financial
instruments and related fair values, outstanding at
January 27, 2007:

Blended Contract

Fair Value Asset

In Thousands

Pay

Receive

Rate

(Liability)

Fair value hedges:

Interest rate swap fixed to
floating on notional of $50,000

LIBOR + 4.17

%

7.45

%

N/A

US$

(2,825

)

Interest rate swap fixed to
floating on notional of $50,000

LIBOR + 3.42

%

7.45

%

N/A

US$

(1,776

)

Intercompany balances,
primarily short-term

C$

128,207

US$

108,942

0.8497

US$

(331

)

debt and related interest

£

702

US$

1,260

1.7949

US$

115

Cash flow hedge:

Interest rate swap floating to
fixed on notional of C$235,000

4.136

%

CAD

BA

%

N/A

US$

718

Net investment hedges:

Net investment in and between
foreign operations

C$

550,204

US$

393,151

0.7146

US$

(93,412

)

£

170,000

C$

407,362

2.3962

US$

17,238

Hedge accounting not elected:

Merchandise purchase commitments

C$

26,166

US$

22,700

0.8675

US$

512

C$

464



305

0.6573

US$

-

£

10,785

US$

21,000

1.9471

US$

(128

)

£

18,084



27,000

1.4930

US$

(482

)

US$

(80,371

)

F-16

The fair value of the derivatives is classified as assets or
liabilities, current or non-current, based upon valuation
results and settlement dates of the individual contracts.
Following are the balance sheet classifications of the fair
value of our derivatives:

January 27,

January 28,

In Thousands

2007

2006

Current assets

$

2,798

$

1,328

Non-current assets

16,688

33,081

Current liabilities

(3,382

)

(16,527

)

Non-current liabilities

(96,475

)

(97,930

)

Net fair value asset (liability)

$

(80,371

)

$

(80,048

)

TJXs forward foreign currency exchange and swap contracts
require us to make payments of certain foreign currencies or
U.S. dollars for receipt of Canadian dollars,
U.S. dollars or Euros. All of these contracts, except the
contracts relating to our investment in our foreign operations,
mature during fiscal 2008. The British pound sterling investment
hedges have maturities from fiscal 2008 to fiscal 2009, the
Canadian dollar investment hedge contracts and interest rate
swap contracts have maturities from fiscal 2008 to fiscal 2010.

The counterparties to the forward exchange contracts and swap
agreements are major international financial institutions and
the contracts contain rights of offset, which minimize our
exposure to credit loss in the event of nonperformance by one of
the counterparties. We do not require counterparties to maintain
collateral for these contracts. We periodically monitor our
position and the credit ratings of the counterparties and do not
anticipate losses resulting from the nonperformance of these
institutions.

F. Commitments

TJX is committed under long-term leases related to its
continuing operations for the rental of real estate and fixtures
and equipment. Most of our leases are store operating leases
with a ten-year initial term and options to extend for one or
more five-year periods. Certain Marshalls leases, acquired in
fiscal 1996, had remaining terms ranging up to twenty-five years.

Leases for T.K. Maxx are generally for fifteen to twenty-five
years with ten-year kick-out options. Many of the leases contain
escalation clauses and early termination penalties. In addition,
we are generally required to pay insurance, real estate taxes
and other operating expenses including, in some cases, rentals
based on a percentage of sales which aggregated to approximately
one-third of the total minimum rent for the fiscal year ended
January 27, 2007 and January 28, 2006, respectively.

Following is a schedule of future minimum lease payments for
continuing operations as of January 27, 2007:

Capital

Operating

In Thousands

Lease

Leases

Fiscal Year

2008

$

3,726

$

845,622

2009

3,726

811,231

2010

3,726

733,511

2011

3,726

637,573

2012

3,897

538,002

Later years

15,323

1,552,165

Total future minimum lease payments

34,124

$

5,118,104

Less amount representing interest

9,888

Net present value of minimum
capital lease payments

$

24,236

The capital lease commitment relates to a
283,000-square-foot
addition to TJXs home office facility. Rental payments
commenced June 1, 2001, and we recognized a capital lease
asset and related obligation equal to the present value of the
lease payments of $32.6 million.

Rental expense under operating leases for continuing operations
amounted to $837.6 million, $774.9 million, and
$713.3 million for fiscal 2007, 2006 and 2005,
respectively. Rental expense includes contingent rent and is
reported

F-17

net of sublease income. Contingent rent paid was
$9.0 million, $7.1 million, and $6.9 million in
fiscal 2007, 2006 and 2005, respectively; and sublease income
was $3.0 million in fiscal 2007, 2006 and 2005. The total
net present value of TJXs minimum operating lease
obligations approximates $4,141 million as of
January 27, 2007.

TJX had outstanding letters of credit totaling
$43.8 million as of January 27, 2007 and
$39.9 million as of January 28, 2006. Letters of
credit are issued by TJX primarily for the purchase of inventory.

We adopted SFAS No. 123(R) using the modified
retrospective method. The modified retrospective method
requires that compensation cost be recognized beginning with the
effective date of SFAS No. 123 (January 1, 1995)
(a) based on the requirements of SFAS No. 123(R)
for all share-based payments granted after the effective date
and (b) based on the requirements of SFAS No. 123
for all awards granted to employees prior to the effective date
of SFAS No. 123(R) that remain unvested on the
effective date.

When the tax deduction exceeds the compensation cost resulting
from the exercise of options, a tax benefit is created. Prior to
the adoption of SFAS No. 123(R), we presented all such
tax benefits as operating cash flows on our Consolidated
Statements of Cash Flows. SFAS No. 123(R) requires
that cash flows resulting from such tax benefits be classified
as financing cash flows. Accordingly $3.6 million of
operating cash inflows in fiscal 2007 and $3.0 million of
operating cash inflows in fiscal 2005 have been reclassified to
cash inflows from financing activity. There were no such excess
tax benefits in fiscal 2006.

The total compensation cost related to stock based compensation
was $45.1 million net of income taxes of $24.7 million
in fiscal 2007, $58.9 million net of income taxes of
$32.3 million in fiscal 2006, and $60.1 million, net
of income taxes of $40.0 million in fiscal 2005.

As of January 27, 2007, there was $82.2 million of
total unrecognized compensation cost related to nonvested
share-based compensation arrangements granted under the plan.
That cost is expected to be recognized over a weighted-average
period of 1.3 years. The total fair value of shares vested
in fiscal 2007 was $75.7 million.

TJX has a stock incentive plan under which options and other
stock awards may be granted to its directors, officers and key
employees. This plan has been approved by TJXs
shareholders, and all stock compensation awards are made under
this plan. The Stock Incentive Plan, as amended with shareholder
approval, provides for the issuance of up to 145.3 million
shares with 22.2 million shares available for future grants
as of January 27, 2007. TJX issues shares from previously
authorized but unissued common stock. On December 6, 2005,
the Board of Directors of TJX determined that beginning in
fiscal 2007, non-employee directors would no longer be awarded
stock option grants under the Stock Incentive Plan, and the plan
was amended to eliminate such awards.

Under the Stock Incentive Plan, TJX has granted options for the
purchase of common stock, generally within ten years from the
grant date at option prices of 100% of market price on the grant
date. Most options outstanding vest over a three-year period
starting one year after the grant, and are exercisable in their
entirety three years after the grant date. Options granted to
directors, prior to the amendment eliminating such awards,
became fully exercisable one year after the date of grant.

For purposes of applying the provisions of
SFAS No. 123 and SFAS No. 123(R), the fair
value of each option granted during fiscal 2007, 2006 and 2005
is estimated on the date of grant using the Black-Scholes option
pricing model with the following assumptions:

Fiscal Year Ended

January 27,

January 28,

January 29,

In Thousands

2007

2006

2005

Risk free interest rate

4.75

%

3.91

%

3.36

%

Dividend yield

1.1

%

1.0

%

0.8

%

Expected volatility factor

32.0

%

33.0

%

35.0

%

Expected option life in years

4.5

4.5

4.5

Weighted average fair value of
options issued

$

8.35

$

6.60

$

6.96

F-18

Expected volatility is based on a combination of implied
volatility from traded options on our stock, and historical
volatility during a term approximating the expected term of the
option granted. We use historical data to estimate option
exercise and employee termination behavior within the valuation
model. Separate employee groups and option characteristics are
considered separately for valuation purposes. The expected
option life represents an estimate of the period of time options
are expected to remain outstanding based upon historical
exercise trends. The risk free rate is for periods within the
contractual life of the option based on the U.S. Treasury
yield curve in effect at the time of the grant.

Stock
Options Pursuant to the Stock Incentive Plan:
A
summary of the status of TJXs stock options and related
Weighted Average Exercise Prices (WAEP) is presented
below (shares in thousands):

Fiscal Year Ended

January 27, 2007

January 28, 2006

January 29, 2005

Options

WAEP

Options

WAEP

Options

WAEP

Outstanding at beginning of year

47,902

$

18.97

48,558

$

18.44

43,539

$

16.97

Granted

5,788

27.03

7,003

21.44

12,828

21.76

Exercised

(14,524

)

17.92

(6,010

)

17.04

(6,534

)

14.83

Forfeitures

(1,312

)

21.93

(1,649

)

20.97

(1,275

)

20.06

Outstanding at end of year

37,854

$

20.50

47,902

$

18.97

48,558

$

18.44

Options exercisable at end of year

24,848

$

18.69

30,457

$

17.61

25,017

$

16.04

The total intrinsic value of options exercised was
$131.6 million in fiscal 2007, $37.5 million in fiscal
2006 and $59.7 million in fiscal 2005.

The following table summarizes information about stock options
outstanding that are expected to vest and stock options
outstanding that are exercisable at January 27, 2007.
Options outstanding expected to vest represents total unvested
options of 13.0 million adjusted for anticipated
forfeitures.